■•■ v ■ 1H&5302 I9»8 i a i.\ l*X lis :::: 'x;: mm ifcP* ^■'XKW.i'* Ijljj & ft IN W'* Cornell University Library HG5302.U61918 ,nvestments in ^A^EaKl" New York §tate College of Agriculture At Cornell University Ithaca, N. Y. Library 806 1 '[I 'uefied '£ 'N 'astlDBJ/fg •aui -sojg pjo|.(Et) sjapuig ^mduicd }unoujOL|jj-| DEPARTMENT OF 'CQMME&CE ^. ; BUREAU OFFJSRElGN AND DOMESTIC COMMERCE H>, S, QUTLEB, CMof SPECIAL AGENTSg|E|«ES-iN^ 161 AND THE BRITISH By Sold t>T tj»e Sop«rioteniJ«»^m>ocunient9. Government Printinf OOce ■" ' ' '~r- — ■ "■ " '"':■'"'"; WASHINeTpN'V : t:."' GOVERNMENT PRUOTINGOETICE Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924014008407 WCxSJO 2- U Lp 111? Special Agents Series No. 169. FIG. 1.— DANK OF PERU AND LONDON, LIMA. DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE B. S. CUTLER, Chief SPECIAL AGENTS SERIES— No. 169 INVESTMENTS IN LATIN AMERICA AND THE BRITISH WEST INDIES By FREDERIC M. HALSEY Special Agent PRICE, 50 CENTS Sold by the Superintendent of Documents, Government Printing Office Washington, D. C. _^ _ WASHINGTON GOVERNMENT PRINTING OFFTCS 1918 Q. /SS6 ? J CONTENTS. Pago. Letter of submittal 17 Introduction 19 Part 1.— SOUTH AMERICA. Argentina 23 Introduction 23 Scope and magnitude of foreign investments 24 Federal loans and finances 26 Plan of readjustment as result of crisis 28 Steady advancement in credit and value of securities 29 Bonds issued during 1915 30 Total bonds outstanding — Position of foreign investors 30 Internal debt of Republic 31 Cedulasof National Mortgage, Bank 32 Total external debt 33 Provincial loans 33 Province of Buenos Aires..: 33 Province of Cordoba 35 Province of Corrientes 35 Other provincial loans (internal) 35 Municipal loans 36 Banks and banking 37 Bank of the Argentine Nation 38 Condition and general character of Argentine banks 38 Italian Commercial Bank 41 Argentine Popular Bank 41 Spanish Bank of the River Plate 42 German Transatlantic Bank 42 British banks in Argentina 43 Other foreign banks 44 Interest rates paid 44 Insurance companies 44 Railway development 46 Central Argentine Railway 47 Buenos Aires Great Southern Railway : 49 Buenos Aires & Pacific Railway and its acquisitions and extensions. . 51 Buenos Aires Western Railway 54 Cordoba Central Railway 56 Entre Rios Railway 58 Argentine North Eastern Railway 59 Central Railway of the Chubut Co 60 Argentine Railway 61 French Railway of the Province of Santa Fe 61 Province of Buenos Aires Railway 63 3 4 CONTENTS. Argentina — Continued . Railway development — Continued. Pago. Rosario & Puerto Belgrano Railway 64 Buenos Aires Central Railway 64 Economic results of foreign railway investments 65 Total payments of dividends and interest on securities 65 Government railways 66 Public utilities 68 Electric light and power companies '. 68 Gas companies 71 Tramways and subways 72 Telephone investments 76 Water supply and sanitary works 76 Mining enterprises 79 Petroleum development 80 Discovery and development of southern field 81 Government and private operation 82 Quality of oil '. 83 Marked increase of priceB — Undeveloped fields 83 Utilization of forest resources 84 The quebracho industry 84 Other forest activities — Statistics of industry 86 Pastoral and agricultural development 87 Statistics of live stock ". 87 British companies in the field 88 Investment of Argentinian capital 88 Exportation of pastoral products 89 The dairy industry 91 Cereal crops 91 The sugar industry 92 Meat-packing companies 94 Manufacturing and commercial pursuits 97 Bolivia 100 Introduction 100 Government loans and finances 102 Municipal loans 103 Banks 103 Railway development 105 Antofagasta & Bolivia Railway 105 Arica-La Paz Railway 107 Guaqui-La Paz Railway 108 Other railways in operation or under construction 108 Projects under consideration 109 Public utilities 110 The rubber industry Ill Mining enterprises Ill Petroleum resources 114 Distribution of Bolivia fields 115 Geological conditions 115 Quality of Bolivian petroleum 115 Remarks on general conditions 116 Manufacturing 116 Foreign capital invested in Bolivia 116 CONTENTS. 5 Page. Brazil 117 Introduction 117 Public debt of Federal Government 119 Principal external issues 119 Sterling floating debt 122 Internal debt 122 State issues 124 State of Alagoas » 124 State of Amazonas 124 State of Bahia 125 State of Espirito Santo 126 State of Maranhao 126 State of Ceara 126 State of Minas Geraes 127 State of Goyaz 127 State of Matto Grosso 127 State of Para 127 State of Parahyba 1 128 State of Parana 128 State of Pernambuco 128 State of Rio Grande do Norte 129 State of Rio Grande do Sul 129 State of Rio de Janeiro 130 State of Santa Catharina 130 State of Sao Paulo 130 State of Sergipe 132 Municipal issues 132 City of Bahia 132 Bello Horizonte 133 Manaos 133 City of Para 133 Pelotas 134 City of Pernambuco (Recife) 134 Porto Alegre 134 City of Rio de Janeiro 135 Santos 136 City of Sao Paulo 137 Internal and semiexternal obligations of Brazilian municipalities 138 Banks ". 139 Insurance companies 142 Railway development 1 142 Central of Brazil Railway 143 Sao Paulo Railway 144 Leopoldina Railway 145 Leopoldina Terminal Co 147 Brazil Railway 147 Madeira-Mamore Railway 155 Great Western of Brazil Railway 156 Brazil Northeastern Railway 157 Northwestern of Brazil Railway 158 Brazil Great Southern Railway and extensions 158 Quarahim International Bridge Co 159 State-owned railways in Bahia 159 Railways of the State of Para 160 6 CONTENTS. Brazil — Continued. Railway development — Continued. Page. Railway development in State of Sao Paulo 160 Other Brazilian railways 161 Shares and debentures of important railways 162 Mileage of Brazilian railways 163 Public utilities 164 Brazilian Traction, Light & Power Co 164 Rio de Janeiro City Improvement Co 166 Tramways and electric plant in Curitiba 167 Water service and drainage system of Sao Paulo 167 City of Santos Improvement Co 167 Public-utility companies in Ceara 167 Pernambuco Tramways & Power Co 168 Public-utility companies in Manaos 169 Para Public Works Co. — Para Electric Railways & Lighting Co 169 Sao Paulo Gas Co 170 Bahia Tramways, Light & Power Co 170 Minas Geraes Electric Light & Tramways Co 171 Tramway system in Nictheroy 171 Public utilities in Rio Grande do Sul 171 Other companies 171 Possibilities of water-power development 172 Securities quoted on stock exchange at Rio de Janeiro 173 Port and harbor improvements 173 Port of Para 174 Port of Manaos 175 Port Antonio 175 Ports between Para and Pernambuco 175 Port of Pernambuco 176 Ports of Jaragua and Aracaju 176 Port of Bahia 176 Port of Victoria 177 Port of Rio de Janeiro 177 Port of Santos 177 Ports between Santos and Rio Grande do Sul 177 Steamship lines 178 Mining enterprises 179 Manganese industry 179 Gold mining ! 180 Copper mining 182 Diamond mining 184 Iron ore 185 Coal mining 187 Platinum 189 Nickel 189 Salt 189 Monazitic sands 189 Graphite 190 Other minerals and precious stones 190 Petroleum deposits 192 Agriculture 192 Coffee 192 Cacao 194 CONTENTS. 7 Brazil — Continued . Agriculture — Continued. Page. Beans 195 Rubber 195 Tobacco 196 Coconuts and copra — Oil nuts — Vegetable ivory 196 Carnauba wax 198 Sugar 198 Other crops 199 Miscellaneous agricultural data 200 Live-stock and meat industries 201 Cattle raising in Rio Grande do Sul 201 Live-stock industry in Sao Paulo and Matto Grosso 203 Sheep and hogs in Brazil 204 British interests 204 Operations of Brazil Land, Cattle & Packing Co 204 Reports by American consul general 204 Timber resources 208 Manufacturing enterprises 209 Industries of Sao Paulo 211 Industries of Bahia 211 Rio de Janeiro Flour Mills & Granaries (Ltd.) 212 Local manufacturing companies 212 Summary 213 Foreign investments in Brazil 213 Chile 216 Introduction 216 Finances and public debt 217 External loans 218 Internal loans outstanding 220 Municipal finances and loans 220 Present situation and prospective requirements 222 Foreign investments in Chile 222 Banks and banking 223 Insurance companies 227 Railway development 229 Central Railway r 230 Longitudinal Railway 230 Finances and operating results of Government railways 231 Caldera-Copiapo line 232 Coquimbo Railway 232 Huasco Railway 232 Arica-La Paz Railway 233 Earnings and expenditures of Government lines 233 Railway statistics 234 Arica & Tacna Railway 234 Nitrate Railways Co 235 Anglo-Chilean Nitrate & Railway Co. — Agua Santa Railway 236 Antofagasta & Bolivia Railway 236 Aguas Blancas Railway 238 Taltal Railway 239 Mineral railway from Algarrobo mines to Caldera 239 Oarrizal & Cerro Blanco Railway 239 Chilean Transandine Railway 240 8 CONTENTS. Chile — Continued. Railway development — Continued. Page. Railway operated by Arauco Co-. 241 Small privately owned railways — Transandine projects 241 Summary of railway situation 241 Railway capitalization and quotations for securities 242 Public utilities 242 Minerals and metals 245 Nitrates 247 Coal mining 250 Iron mining 251 Copper mining 252 Sulphur mining _. 257 Gold mining 257 Silver mining 258 Chilean salt deposits 258 Miscellaneous mining data 258 Oil in Chile 259 Industrial development 259 Miscellaneous forms of investment 260 Operation of ascensors 260 Stores and hotels 261 Steamship lines 261 Santiago and Valparaiso Stock Exchanges 261 Lumbering activities and timber resources 262 Agriculture and viticulture — Live-stock industry 263 Summary of Chilean field 264 Colombia 265 Introduction 265 External debt 266 Internal debt 267 Municipal loans 268 Banks 268 Railway development 268 Antioquia Railway 269 Barranquilla Railway & Pier Co 270 Colombia Railway & Navigation Co 270 Cucuta Railway 270 Dorada Extension Railway — Dorada Ropeway Extension 271 Colombian National (or Girardot) Railway 272 Pacific Railway 272 Colombian Northern Railway 273 Sabana Railway 273 Tolima Railway — Colombian Southern Railway 273 Santa Marta Railway 273 Discussion of comprehensive program for railway development 274 Public utilities 275 Mining enterprises 275 Companies engaged in gold mining 276 Emerald mining 277 Platinum 278 Iron 279 Coal 279 Salt 279 CONTENTS. 9 Colombia— Continued . Mining enterprises — Continued. Page. Asphalt 279 Petroleum 279 Summary of possibilities 281 Agriculture and stock raising 281 Forest products 282 Manufacturing 282 Summary of investment prospects 283 Ecuador 285 Introduction 285 National debt 285 Provincial and municipal finances 286 Banks 287 Railways 287 Guayaquil & Quito Railway 287 Other railways in the Republic 289 Public utilities 290 Mining and petroleum enterprises 291 Agriculture 292 Forest resources : 293 Manufacturing. 293 The Guianas 294 British Guiana 294 Introduction 294 Bonded debt — Finances 294 Banking and insurance 295 Railway development 295 Public utilities. 297 Mining enterprises 298 Timber resources 299 Live stock • 299 Sugar.... 299 Rice 300 Coconuts, cacao, etc 300 Rubber and balata industries 300 Total trade 301 Dutch Guiana „ 301 Introduction 301 Transportation conditions 301 Agriculture and related industries - 301 Gold mining 302 Undeveloped resources — Factors retarding development : 302 French Guiana 303 Paraguay 305 Introduction 305 Government loans and finances 305 Banks 308 , Insurance companies 309 Railway development 310 Public utilities 312 Mining. 312 Quebracho and other forest industries 313 The live-stock industry 315 10 CONTENTS. Paraguay — Continued. Page. Agriculture 316 The sugar industry 316 The yerba-mate industry 317 Other agricultural products: Tobacco, fruit, coffee, cotton 318 Manufacturing and commercial enterprises 319 Summary of investments in Paraguay 319 Peru 321 Introduction 321 Foreign investments in Peru 322 Government finances 322 Municipal loans 323 Banks 324 Insurance companies 326 Railway development 326 Capital and investments of Peruvian Corporation 327 Peruvian Central (Oroya) Railway 328 Southern Railway of Peru 329 Trujillo Railway 330 Paita-Piura Railway 330 Pacasmayo-Guadalupe Railway '. 331 Chimbote Railway 331 Pisco-Ica Railway 332 Ilo-Moquegua Railway 332 Railways not controlled by Peruvian Corporation 332 Miscellaneous railway lines 333 Public utilities 334 Important companies in Lima-Callao district 334 Public-utility enterprises in Arequipa 335 Mining enterprises 335 The petroleum industry 337 Distribution of Peruvian fields 337 Surface indications 339 Statistics of production 339 Guano gathering 340 Agriculture 340 Local enterprises in the Republic 342 Uruguay 345 Introduction 345 Government finances 346 External loans 346 Internal loans 348 Mortgage Bank certificates 348 Municipal external bonds 349 Recent financial conditions „ 349 Banks and banking 349 Insurance 351 Railway development 352 Central Uruguay Railway and extensions 353 Midland Uruguay Railway 356 Northwestern of Uruguay Railway 357 Uruguay Northern Railway 358 Uruguay East Coast Railway 359 Durazno-Trinidad Line (State railway) 359 CONTENTS. 11 Uruguay — Continued. ' Railway development — Continued. Page. Record of operations and outlook for future 359 Project for system of Government railways 360 Public utilities 361 Montevideo Waterworks Co 361 Montevideo Gas Co 362 Street railway companies in Montevideo 363 Montevideo Telephone Co 364 Telegraph lines 365 Minerals and mining development 365 Forest products 366 Live-stock and meat industry 366 Agriculture 368 Manufacturing and industrial enterprises 369 Venezuela 370 Introduction ; 370 Government finances 371 Banks 372 Railway development 374 Bolivar Railway 375 La Guaira-Caracas Railway 376 Great Railway of Venezuela 376 Puerto Cabello- Valencia Railway 377 Central Railway of Venezuela 377 Great Railway of Tachira 378 La Ceiba Railway 379 Santa Barbara-El Vigia Railway 379 Guanta-Naricual Railway 380 Carenero Railway 380 Coro-La Vela Railway 381 Lines and extensions contemplated or suggested 381 New law governing railway concessions 382 Securities and quotations of British-controlled lines 382 Public utilities 383 Mining enterprises 384 Copper 384 Gold 384 Coal and iron 385 Other minerals 386 Pearl fisheries 386 The petroleum industry 386 Caribbean Petroleum Co 387 Colon Development Co 388 Venezuelan Oil Concessions 388 Venezuela-Falcon Oil Syndicate 389 Bermudez Co 389 Pauji Concession 390 Oil and coal deposits administered by Government 390 Development of asphalt deposits 391 Forest products 392 Stock raising and the meat industry 393 Agriculture 394 Manufacturing 394 Foreign capital in Venezuela 395 12 CONTENTS. Part 2.— CENTRAL AMERICA. Page. British Honduras 397 Introduction 397 Bonded debt 397 Banking 397 Railways 397 Public utilities ." 398 Products of the colony 398 Costa Rica 400 Introduction 400 Bonded debt '. 400 Banks 401 Railways 401 Costa Rica Railway 403 Public utilities 404 Agriculture 405 Mining enterprises 406 Manufacturing 407 Foreign investments in Costa Rica 408 Guatemala 409 Introduction ■ 409 Government loans and finances 409 Banks 410 Railways 411 Public utilities 414 Mining enterprises 415 Opportunities in the Department of Peten 416 Forest resources 417 Stock raising 418 Agricultural products 418 Industrial and manufacturing activities 419 Present outlook 419 Honduras 420 Introduction 420 Government loans and finances 422 Banks 423 Railways 424 Public utilities 425 Mining enterprises 425 Agricultural and pastoral industries 428 Forest wealth ,. 429 Manufacturing : 429 Surveys by an American company — Proposed undertakings 430 Nicaragua 432 Introduction 432 Funded debt 432 Railways 434 Public utilities 435 Mining enterprises 435 Agriculture 436 Cattle and other live stock 437 Forest products 437 Manufacturing 437 Foreign capital invested 437 CONTENTS. 13 Page. "Panama 438 Introduction 438 National debt 438 Railways 439 Public utilities 440 Agriculture 441 Cattle raising 442 Minerals 442 Forest products 443 Salvador 444 Introduction * 444 Debt and finances 444 Banks 445 Railways 445 The Salvador Railway 445 International Railways of Central America 446 Public works and improvements 447 Minerals and mining 447 Agriculture — Live stock — Forest resources 448 Manufacturing 448 Part 3.— THE WEST INDIES. The Bahama Islands 449 Barbados 450 Introduction 450 Loans and finances 450 Banks '. 451 Railways 451 Public utilities 452 Agriculture , 452 Mining 453 Manufacturing 453 Guadeloupe 454 Jamaica 455 Introduction 455 Funded debt 455 Banks 456 Railways : 456 Public utilities 458 . Mining 458 Agriculture and fruit raising 459 Forf st resources : 460 Manufacturing 460 Foreign investments in Jamaica 461 The Leeward Islands 462 Introduction 462 Antigua 462 Bonded debt 462 Railways and public utilities 463 Industries 463 Dominica - 463 Bonded debt 464 Railways and public utilities 464 Industries 464 14 CONTENTS. The Leeward Islands — Continued. Page. Montserrat 465 Bonded debt 466 Industries 466 St. Kitts and Nevis 466 Funded debt 467 Railways and public utilities 467 Industries 467 British Virgin Islands 468 Summary 468 Martinique 469 Trinidad and Tobago 470 Trinidad 470 Introduction 470 Government bonds 470 Railways 471 Public utilities 471 Petroleum 472 Manjack and asphalt 473 Agriculture 474 Tobago 476 The Windward Islands. 477 St. Lucia -. 477 Public debt 477 Railways and public utilities 477 Industries 477 Grenada 478 Funded debt 478 Public utilities 478 Industries 478 St. Vincent 479 British West Indian bonds as investments 480 APPENDIXES. Appendix A. — South America 483 Argentina 483 Bolivia 500 Brazil 502 Chile 512 Colombia 517 Ecuador 519 British Guiana 520 Dutch Guiana 520 Peru 520 Uruguay 525 Venezuela 526 Appendix B. — Central America and the West Indies 531 Costa Rica 531 Honduras 531 Nicaragua 531 Salvador 532 British West Indies 532 Appendix C. — International enterprises and general data 536 Mercantile, public-utility, and shipping companies 536 Statistics of important Latin American banks 538 CONTENTS. 15 ILLUSTRATIONS. Page. Fig. 1. Bank of Peru and London, Lima facing. . 1 2. Retiro Station, Central Argentine Railway, Buenos Aires facing.. 48 3. Plaza Constitucion Station, Buenos Aires Great Southern Rail- way facing.. 49 4. Scene from Puente del Inca, showing mountains of Argentine Andes and section of cog railway '. facing. . 60 5. Buenos Aires & Pacific Railway: Water tank cars and stacks of wood burned in locomotives facing. . 61 6. Type of car used in Buenos Aires subway facing.. 74 7. Large grain elevator at Rosario, Argentina facing. . 75 8. Antofagasta & Bolivia Railway, at frontier between Bolivia and Chile facing. . 112 9. Silver mines at Oruro, Bolivia ; , facing.. 113 10. Hydraulic station of Rio de Janeiro Tramway, Light & Power Co facing.. 164 11. Floating quays at Manaos, Brazil facing.. 165 12. Street scene in Sao Paulo, Brazil facing.. 192 13. Coffee-cleaning plant, Brazil facing.. 193 14. Scene at Lota coal mines, Chile facing. . 250 15. Train at Antofagasta, Chile, loaded with nitrate facing.. 251 16. Steamers on Magdalena River, Republic of Colombia facing.. 268 17. Railway construction in Colombia: "!E1 Gobierno" fill on Amaga line 1 facing. . 269 18. Bridge connecting two tunnels on Peruvian Central Railway. facing. . 328 19. View of Cerro de Pasco Railway, Peru facing. . 329 20. Backus and Johnston, smelter at Casapalca, Peru facing. . 336 21. Port of Mollendo, Peru facing.. 337 22. American locomotives being erected at Durazno, Uruguay. . . facing. . 360 23. Liebig beef-extract plant, Fray Bentos, Uruguay facing.. 361 Railway map of South America facing.. 544. LETTER OF SUBMITTAL. Department of Commerce, Bureau oe Foreign and Domestic Commerce, Washington, June 15, 1918. Sir : There is submitted herewith a report by Special Agent Fred- eric M. Halsey on investments in Latin America (except Mexico) and the British West Indies. One of the outstanding facts in the foreign commerce of the great exporting nations has been the way in which such trade has been enlarged and stimulated by the invest- ment- of capital in the countries to which the goods are sold. Enter- prises that owe their existence to foreign capital are naturally in- clined to purchase equipment and' supplies in the land of their finan- cial origin. And, again, the willingness of foreign capitalists to assist in the development of a country's resources creates a favor- able attitude on the part of that country's citizens and a receptivity toward other business propositions. Before the war the command- ing position of European nations in certain Latin- American markets was due in large measure to their great investments there. The realization of these facts has impelled the Bureau of Foreign and Domestic Commerce to undertake a comprehensive survey of the investment situation in this field, to the end that a larger amount of American capital may eventually find its way thither and a cor- responding commercial advantage be derived. The Bureau appre- ciates fully the exigencies of war conditions and the undesirability of diverting capital at this time to foreign fields, yet it feels that preparation may properly be made for the expansion that will come after the termination of the war. By means of the present mono- graph it desires to place in the hands of American financial inter- ests a succinct statement of what has been done thus far in the in- vestment line. Mr. Halsey has purposely avoided speculations as to the future or suggestions with regard to new, uncertain ventures. He has simply presented a record of present effort and past accomplishment. Each country is dealt with individually. Records of the national debts, and in some instances of State and municipal debts, are given, to- gether with brief financial histories of the several countries. Rail- ways and public utilities are discussed, as well as mines, farming 63018°— 18 2 17 18 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. /. activities, manufacturing establishments, and the other forms of en- terprise that have attracted capital to the rich territory lying to the south. The financial statements of public companies are included in many cases to indicate some of the results obtained. The statistical data and other information contained in this mono- graph are necessarily incomplete. It is, however, the hope of the Bureau that it will prove a concise manual of useful facts and the groundwork for future action or investigation. Almost without ex- ception the statistics have been drawn from official sources, usually from annual reports of companies or statements furnished by the various Governments. All data concerning Government, State, and municipal obligations are presented without comment. Certain of the illustrations have been made available through the courtesy of the Pan American Union. Eespectfully, To Hon. William C. Kedfield, Secretary of Commerce. B. S. Cutler, Chief of Bureau. INVESTMENTS IN LATIN AMERICA AND THE BRITISH WEST INDIES. INTRODUCTION. The Continent of South America, containing as it does extensive areas of undeveloped and partly developed territories, has proved a magnet for the investment of considerable amounts of foreign capital. Great Britain, France, Germany, Belgium, the Netherlands, and to a less extent, perhaps, the United States, have investigated opportuni- ties in the southern continent and have successfully developed rail- ways and public utilities, mines and manufactures, farms and cattle ranches, have purchased Government, State, and municipal bonds, and have otherwise made investments in the field. It is a matter of some interest (and perhaps significance) that Great Britain during the several months preceding the outbreak of the great European war placed larger sums in Argentina than in the United States. The outbreak of the war in 1914 brought about an immediate change of conditions in the European investment markets. The conservation of the resources of the various warring countries and their neighbors immediately stopped the exportation of capital from Europe, and the Latin Republics became dependent on the United States for their needs financially. Before the war the interests of the United States in South America, other than in mines and the packing industry, were negligible. Dur- ing the lull that followed the closing of the various stock exchanges much attention was given to Latin America, and the first steps were taken to interest American bankers in the opportunities presented in that field. During the early months of 1915 a loan was made to Argentina by American investment houses, and the bonds were pub- licly offered with success. Other loans followed this one, and a number of shares in railways in Argentina were purchased by in- vestors' through London. Two short-term note issues of South American railways were afterwards floated in the United States, these being obligations of the Antofagasta (Chile) & Bolivia Railway ($3,000,000), and the Central Argentine Railway ($15,000,000). Other investments (largely in mining securities) were made, includ- ing bond issues of the Cerro de Pasco mines, the Chile Copper Co., and the Braden Copper Co., operating in Peru (Cerro de Pasco Mining Co.) and in Chile. These three great mining properties,, developed through the investment of American capital, have become the greatest mining properties in South America and rank among the most important copper producers in the world. American inter- ests have also turned their attention to developing the petroleum resources of Venezuela, Colombia, and Peru, as well as the nitrate 19 20 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. fields of Chile, the manganese deposits of Brazil, and other forms of enterprise. Concerning the undeveloped wealth of the various South American countries, it may be said that minerals exist in all the Republics, that the forest resources of all (except possibly Uruguay) are very exten- sive, that oil deposits have been found in almost every country and are worked commercially in Argentina, Colombia, Chile, Ecuador, Peru, and Venezuela, and that there are lands available for the rais- ing of live stock and for agricultural purposes. Although public utilities have been developed to a considerable extent, the vast amount of water power available assures a future of greater importance for this field of enterprise. Great Britain has long been the largest investor in South America. The following table indicates the approximate amounts placed by that country in the various Latin American nations and in the West Indian Islands. The figures as submitted are said to be conservative : Class and nationality of securities. Amount." CLASS OF SECDEITIES. Govern mental, State, and municipal loans Railway securities, stocks, debentures, etc Industrial, land, timber, oil, lighting, etc Total DISTKIBUTION OF INVESTMENTS. Argentina Brazil Chile Uruguay Peru Venezuela Colombia Bolivia Paraguay Ecuador Guianas Total, South America Mexico Cuba Guatemala Costa Rica Honduras Nicaragua Santo Domingo and Haiti British Honduras Porto Rico Total, Mexico, Central America, and Latin West Indies Shipping Banks and trust companies Grand total $1,571,879,600 2,350,519,500 1,265,290,000 5,187,689,000 897,935,000 119,295,000 340,655,000 243,325,000 121,662,500 39,905,300 33,578,900 17,519,400 14,509,500 13,626,200 8)759,700 3,850,861,500 798,106,000 229,698,800 51,098,200 32,118,900 15,086,200 5,839,800 3,406,500 1,460,000 2,919,900 1,139,734,300 97,330,000 99,763,200 5,187,689,000 « Converted at the normal rate of $4.8665 from round-sum estimates expressed in pounds sterling. In addition to the above total, Great Britain has invested fairly large amounts in British West Indian, colonial, and other securities. The total British West Indian investments would probably approxi- mate $60,000,000, including some $30,000,000 in colonial loans and upward of $20,000,000 in Trinidad oil securities. Thus the approxi- mate total invested in governmental and municipal securities and in stock enterprises throughout South and Central America, Mexico, and the West Indies may conservatively be said to approach $5,250,000,000. INTEODUOTION. 21 No figures are available as to the extent of French investments in Latin America. The amount placed in Argentina is said to total $400,000,000, and fully that sum has gone into Brazilian loans and enterprises ; in fact, some estimates place the total amount of French capital in that field as high as $800,000,000. There is likewise French capital in practically all of the other Eepublics. The in- vestments in Argentina include three railway lines with a mileage of approximately 2,500, Government bonds, banks, etc. The French have made loans from time to time to Bolivia,- hold interests in mines, and have otherwise made investments in that Republic. French engineers are at present building a section of the railway link to con- nect the highlands of Bolivia with the railways of Argentina. The public-utility enterprises of La Paz, the capital, are under French ownership and management. Numerous Brazilian Federal and State loans have been floated in France, while a number of import- ant railways, including a large interest in the Brazil Railway, are held by the French. Their investments in Ecuador, Colombia, Chile, and Venezuela have also been large. Possibly a fair estimate of French investments in Latin America would be $1,500,000,000 to $1,700,000,000. Germany, with its chain of banks and its pre-war merchant marine, occupied an important place in Latin America. With the possible exception of its banks, the most important of its investments are in the public-utility field, the Compania Aleman Transatlantic de Electricidad, of Buenos Aires, controlling the most important electric properties of that city, a tramway line in Montevideo, Uruguay, elec- tric properties in Mendoza, Argentina, and electric lighting and street railway properties in Valparaiso and Santiago, Chile. These enterprises, collectively, form probably the largest public-utility group in Latin America. The Great Railway of Venezuela, from Valencia to Caracas, is the only German railway of importance, but German interests in other fields are numerous. The Netherlands and Belgium are both owners of banks, Latin American Government loans, and other securities. The Netherlands holds probably the second largest block of shares in the Peruvian Corporation, while Belgium has always looked with favor on the "cedulas," or Government-guaranteed mortgage obligations, of the larger Republics. A large amount of Brazil Railway stock is also held by Belgian interests. Canada has had a place in the field, its interests having been im- portant in the development of the traction and electric-lighting properties of Rio de Janeiro and Sao Paulo, Brazil. Canadian public-utility companies are also prominent in British Guiana, Trini- dad, and Jamaica. Italy, Spain, and one or two other countries also have Latin American investments, but their interests are not large. The principal subjects discussed in the various chapters of this monograph are Government, State, and municipal loans, banks, rail- ways, public utilities, insurance companies, manufactures, mines, shipping, forest products, and agriculture. In the appendix will be found income accounts of a number of companies (mostly such as are not included in the general discussion), quotations and dividend records of securities listed on the various stock exchanges, and other relevant data. Part 1.— SOUTH AMERICA. ARGENTINA. INTRODUCTION. Argentina is preeminently a land of progress. Thirty years ago its great natural resources were undeveloped and its rich soil virtu- ally untilled. To-day, as a result of its steady, consistent advance, the Republic has come to rank among the foremost producing nations of the world. The greatest source of wealth lies in the magnificent pampas — grassy, treeless plains, stretching from the Atlantic to the foothills of the Andes and from the Gran Ghaco to the far south. Within this vast area millions of bushels of wheat, maize, linseed, oats, etc., are produced, arid millions of cattle, sheep, horses, and other domestic animals are raised. The country usually stands seventh among the nations of« the world in the production of wheat, fourth in the area of wheat sown, and either first or second in the amount of wheat exported to other countries. The area nor- mally under cultivation is estimated at approximately 17,000,000 acres, which, it is stated, is not more than one-fifth of the area avail- able for the production of this grain. The maize production in 1915 amounted to 8,591,645 tons, valued at nearly $75,000,000, United States currency. The linseed production of Argentina is the largest in the world, amounting to approximately 1,700,000 tons per annum. Upward of 4,000,000 acres are under cultivation for linseed, as com- pared with approximately 10,000,000 acres for maize. The value of the agricultural production for the year 1915-16 was nearly $750,000,000. The live-stock industry has assumed vast importance. There are at least 30,000,000 head of cattle, 80,000,000 sheep, 9,000,000 horses, and numerous other live stoek in the country, valued at more than $1,250,000,000. There has been developed a vast export business in frozen meats, hides, wool, etc. The total national production for 1915-16 was estimated at more than $1,400,000,000, this including animal products to the amount of about $500,000,000 gold. Argentina is usually spoken of as the richest nation per capita in the world, and this condition is the result of the great productivity of the farms. With an area of approximately 1,137,200 square miles, Argentina had an estimated population in 1916 of 8,198,006, as compared with 7,885,237 in 1914, 7,171,000 (estimated) in 1911, and 3,995,110 in 1895. During a period of 20 years, therefore, the population has doubled. Buenos Aires, the capital of the Republic, has nearly 1,700,000 inhabitants. It is the largest city in Latin America arid the most populous capital city in the Western Hemisphere. The city covers an area of more than 720 square miles, and is a marvel of 23 24 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. splendor and luxury. Real estate sales in the city during a normal year exceeded $180,000,000 gold. Traction and subway lines have a total mileage of 455 and carry during normal years more than 400,000,000 passengers annually. As a port the city ranks second in the Americas and seventh in the world. Here, in the year 1913, there came from foreign countries a total of 5,137 vessels, of 13,818,646 tons, bringing 85 per cent of the nation's imports and taking 45 per cent of its exports. At Buenos Aires are located the terminals of the great railway systems of the Republic. Statistics recently issued by the Argentine Government show that the value of the foreign trade of the country during the calendar year 1917 was $897,924,034 United States currency, of which $530,- 914,097 represented exports and $367,009,937 imports, leaving a net trade balance in favor of the country of $163,904,160. For the first time in the history of the country the statistics show actual c. i. f. values. Formerly fixed values corresponding.to the Argentine tariff were used in computing these statistics. These values were fixed in 1898 and no longer represent actual values. The increase in the values of imports in 1917 over those of 1910, when actual values and fixed values were approximately the same, range from 5.7 per cent on silk goods to 259.2 per cent on china and glass ware. Since the beginning of the war the values of imports have increased 95.3 per cent and of exports 74.7 per cent. The Argentine Government has rectified the total values of exports and imports, for the years 1913, 1914, 1915, 1916, and 1917 to corre- spond to actual values, and these rectified figures are as follows Imports— 1913, $478,859,146 : 1914, $311,241,415; 1915, $294,795,926 1916, $353,316,001 ; 1917, $367,009,937. Exports— 1913, $500,985,551 1914, $389,021,914; 1915, $561,803,004; 1916, $552,994,539; 1917, $530,914,097. A vast increase in foreign trade may be looked for when the Euro- pean war is ended and immigration on a large scale begins again. Argentina, except in a few lines, had not enjoyed normal prosperity during the three or four years preceding the preparation of this report. This fact, with the lack of immigration, had, temporarily, somewhat checked the nation's progress. The boundless resources of the country and the wonderful fertility of the pampas assure, how- ever, the future of Argentina. The Republic, as will be shown in these pages, has attracted vast sums of foreign capital in the past, and there seems little reason to doubt that it will continue to serve as a magnet for the money of investors. SCOPE AND MAGNITUDE OF FOREIGN INVESTMENTS. In the days before the great war the financiers of Europe watched with eager eyes for opportunities that might arise to place sums of money in the development of Argentina. Great Britain took the initiative and has long maintained first position. in the field. An estimate recently made by the author of this report placed the total of British capital invested in Argentina at $1,897,935,000. About one-half of this sum has been used for the construction and opera- tion of railways, including the most important lines in the Republic, and the remainder has been placed in Government loans, public utilities, land enterprises, sugar plantations, cattle ranches and meat SOtJTS AMERICA — ARGENTINA.. 25 establishments, banks, department stores, etc. A very large part, of the national debt of Argentina is held in Great Britain, as are numerous provincial and municipal securities. The British-owned banks are a most important factor in the Argentine Republic, and an all-important aid to British trade. France has placed, according to estimates by French bankers, upward of $400,000,000 in Argentina, including important invest- ments in banks, Government loans, one large and several smaller railway systems, land enterprises, etc. German investments are next in importance, powerful Teutonic interests controlling public utilities that operate in Buenos Aires, Rosario, and elsewhere. Ger- man banks have in the past wielded great influence in Argentina. A number of large land and cattle concerns have also been financed by German capitalists. "While figures are not available, it is reasonable to suppose that nearly $250,000,000 of German capital is invested in Argentina. These sums have been so carefully placed that great com- mercial advantages have been obtained by Germany. The United States, with its banks, meat-packing concerns, and other undertakings, is beginning to be a factor in the economic de- velopment of Argentina. The conditions in the European money markets, due to the war, have caused the Argentine Government to seek several loans in the United States, and this has led to the estab- lishment of much closer financial relations between the two coun- tries. Possibly there is $100,000,000 of American capital in Argen- tina invested in Government loans, banks, public industrial enter- prises, railway bonds, etc. Fair-sized amounts of Government bonds are held in the Nether- lands. Most of the external loans of Argentina are listed on the stock exchange at Amsterdam. Dutch capital is also invested in banking institutions, while an important steamer line of Dutch nationality maintains a regular service to the River Plate. Italian and Spanish capital is also present, mostly in banks. Belgian capi- talists control certain banking institutions and hold some land in- vestments. Between $4,000,000,000 and $4,500,000,000 gold of foreign capital is invested in Argentina, according to an estimate made by Dr. Alberto B. Martinez, the well-known Argentine statistician, who delivered a lecture on May 31, 1918, before the Instituto Popular de Conferencias (Popular Institute of Conferences) on the subject of foreign capital investments in Argentina. Dr. Martinez divides foreign investments in Argentina as follows, the amounts being in gold pesos of $0.9648 : Pesos. Various Argentine loans and issues 657, 303, 460 Railways 1, 344, 326, 465 Banks 51,891, 022 Ports 22,163,909 Tramways 109, 496, 149 Freezing establishments 40,916,439 Gas, electricity, water, and drainage companies 78, 373, 018 Land and rural property companies 79,681,618 Mortgages 500, 015, 962 Insurance 3, 886, 464 Industrial establishments 507, 760, 000 Telephone and radio-telegraphic companies 21,340,000 Commerce 465,169,244 Total 3. 8 82 . 323, 750 26 INVESTMENTS IK LATIN AMERICA AND BRITISH WEST INDIES. Unless unforeseen conditions develop, the United States during the next decade will be the creditor nation for Argentina. Opportunities for the placing of capital in such a rapidly expanding country are presenting themselves daily and will continue to present themselves. American investors have shown themselves responsive to offerings of Argentine securities. Such offerings as have recently been made have been absorbed very quickly. Before 1915 and 1916 American investors had seldom looked across the nation's boundaries for fields in which to place capital. The general change in conditions brought about by the war was responsible for a new investment policy. American capital, forced for the first time to seek new outlets, turned not unnaturally to South America and in making its initial selection chose the Argentine Republic because of its advanced position among the southern nations. The present report can only picture briefly the scope and magnitude of this investment field. However, the various phases of the field, such as railways, public utilities, governmental securities, industrials, etc., will be considered in a general way. Space will not permit an exhaustive study of each class of investments or the presentation of such material, for example, as complete data concerning the credit and national wealth of the Government, its railways, and other jlSSGts FEDERAL LOANS AND FINANCES. Governmental loans of the Argentine Republic have long enjoyed wide favor among European investors. In pre-war days the bonds sold at a substantial premium, indicating the high credit of Argen- tina in the European markets. After the outbreak of the war the closing of the markets of Great Britain, France, and other countries brought about a decline in the market value of these bonds, and natu- rally compelled Argentina to pay a higher price than before for nec- essary funds. In view of the war, the Government has been obliged to retrench in many branches of its service and postpone the carry- ing out of certain improvements of a national character. Revenues from customs and other sources fell far below expectations, and the general business depression, which dated from a period shortly be- fore the war, was so long extended that fears were expressed that governmental financial difficulties might arise. However, despite the financial uncertainty, the Government maintained its credit in a most praiseworthy manner and punctually met all obligations. The large grain exports of 1915-16 and the general demand for other products of the country naturally brought about an improvement in national credit; this was partially offset, however, by the crop failure of 1916-17. Detailed information concerning the early financial history of Ar- gentina will not be presented here. Its early financial history was not unlike that of other nations in the making, and difficulties were sometimes encountered. In 1824 Argentina made its first external loan— £1,000,000 at 6 per cent, sold in London, by the Province of Buenos Aires, at 85 per cent. Interest was defaulted in 1830. In later years the Government rec- ognized the loan and paid it off, converting its arrears of interest into bonds. In 1863 and 1866, 6 per cent loans were floated, the first in Buenos Aires and the latter abroad, to meet expenditures to carry on the war SOUTH AMEBICA ARGENTINA. 27 with Paraguay. The first-mentioned internal loan was afterwards converted into 3£ per cent external sterling bonds, and the latter loan was extinguished through sinking funds in 1889. In 1870 the Province of Buenos Aires sold £1,034,700 6 per cent bonds at 88 per cent. These bonds were recognized by the Govern- ment as an external loan in the year 1880. The outstanding portion of this loan and of the 6 per cent National Public Works Loan of the Republic (£6,122,400 bonds issued in 1871 at 88^ per cent) were con- verted in 1889 into 4£ per cent conversion bonds (see a subsequent paragraph). In 1873 the Province of Buenos Aires sold an addi- tional £2,040,800 6 per cent bonds, which were subsequently converted into the 4£ per cent bonds mentioned above. This loan was originally offered for subscription at 89| per cent and in 1880 was recognized by the Government as a part of its debt. In 1876, $6,000,000 9 per cent treasury bonds were sold in Argen- tina. They were subsequently quoted on European markets. Most of these bonds were afterwards converted into external bonds bear- ing a lower rate of interest. During the year 1881 a £2,450,000 6 per cent railway loan was floated in London and Paris at 91 per cent. There was a sinking fund of 1 per cent. The proceeds of the loan were used to provide funds for the construction of various railways, the revenues from the operation of these lines being pledged for the service of the bonds. In 1889 a large part of the loan was converted into 5 per cent de- benture stock of the Cordoba Central Railway. The balance was sub- sequently extinguished. A 6 per cent loan to the amount of £817,000 was issued in 1882 in London and Paris. The sinking fund of 2 per cent retired a portion of the loan and the balance was converted in 1889 into 4| per cent conversion bonds. In 1884, £1,714,200 5 per cent bonds were offered in London at 84J per cent, the principal to be paid off by a cumula- tive sinking fund of 1 per cent per annum. The bonds sold at 104 during recent years, and are now quoted at about 96. Approximately £850,000 remain outstanding. During the years 1886 to 1889 several loans were floated and vari- ous earlier bond issues exchanged for bonds of the conversion 3£ per cent and 4| per cent loans. These included the 5 per cent loan of 1886 and 1887, of which £4,000,000 were issued in 1886 and publicly offered by Baring Bros. & Co. in London at 80 per cent. In 1887 the same firm and J. S. Morgan & Co. issued an additional £4,290,000 of the bonds at 85£ per cent. The two issues are redeemable by a cumulative sinking fund of 1 per cent and are secured on customs duties. Approximately £5,000,000 of the two issues remain outstand- ing. In the same year (1887) a loan known as the Banco Nacion (German) 5 per cent loan was floated in Germany. The loan was for approximately $10,000,000 o/s. 1 An accumulative sinking fund has reduced the total to about $7,000,000. These bonds are not quoted outside of Germany. the i The Argentine gold peso, worth $0.9648 in United States currency, is designated by e sign $o/s, the o/s standing for " oro sellado " (eoiiied gold). The paper peso, worth about $0.47 in United States currency on January 1, 1918, is designated by $m/u, the m/n standing for " moneda nacional " (national money). These signs will be used throughout the Argentine section of this report. When a figure is followed by either o/s or m/n it must be understood that the $ sign preceding it indicates Argentine pesos, not American dollars. 28 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. In 1887 Argentina made a slight adjustment of its finances by con- verting $3,582,315 o/s 9 per cent internal bonds into 5 per cent treas- ury conversion bonds at the rate of £20 10s. of new bonds for each $100 of the old bonds. This conversion called for the issuance of £624,000 new bonds. A total of £422,000 of these bonds remain out- standing. During the years 1887 to 1889 the Government adopted a program of railway expansion and began the construction of various lines in the northern sections of the country. In order to carry on these extensions there was authorized the Northern Central Eailway exten- sion 5 per cent Government mortgage loan to secure £3,968,200 bonds, which were issued, £1,300,000 in 1887 at 91J per cent, £1,500,000 in 1888 at 94 per cent, and £1,168,200 in 1889 at 97 per cent. The bonds are secured by a mortgage on the railway extensions constructed with the proceeds of the loan. Like practically all of the external loans, these bonds are listed on the London Stock Exchange. Approxi- mately £2,700,000 of the loan remains outstanding. The accumula- tive sinking fund is 1 per cent per annum. In 1889 a 4| per cent loan was authorized. Although this was classed as an internal loan, a large proportion of it was offered in Europe at 87 per cent. Its total amount was £3,933.380. and its pur- pose was to fund debts previously contracted at a higher rate of interest. Approximately £2,700,000 of the bonds remain outstanding. In the same year the Government authorized two conversion loans in order to fund certain loans issued at an earlier date bearing high rates of interest. These loans bear interest at 4-J per cent and 3 \ per cent, iespectively, and were issued as follows: (1) The 4£ per cent loan for £5,290,000 for the purpose of repaying the 6 per cent loans of 1871 and 1882, as well as the 6 per cent loans of 1870 and 1873 of the Province of Buenos Aires; this loan was offered for public subscription at 90 per cent. The accumulative sinking fund of 1 per cent per annum has reduced the total outstand- ing to approximately £3,700,000. (2) The Z\ per cent loan for £2,659,500, of which approximately £1,500,000 remains outstanding. These £2,659,500 bonds were given in exchange for $12,973,200 internal bonds bearing higher rates of interest at the rate of £20 10s. new bonds for each $100 gold bonds. In 1890 there were issued £2,976,000 5 per cent railway bonds, known as the Northern Central Railway loan. These bonds were not publicly offered until a number of years later, but were used as collateral for other loans of a temporary character. PLAN OF READJUSTMENT AS RESULT OF CRISIS. In the same year the Republic underwent a serious economic and financial crisis, and a committee was appointed by the Bank of Eng- land to work out some plan of readjustment. Through the efforts of this committee it was arranged that the Government of Argentina should continue the service of the loans outstanding in the following manner: (1) Loan of 1886-87, interest and sinking fund in cash; (2) all other loans, service of interest and sinking fund from Jan- nary, 1891, to January, 1894, in 6 per cent funding-loan bonds, secured upon the customs receipts of the Republic, subject to the 1886-87 loan. The coupons of this loan were declared receivable for SOUTH AMERICA ARGENTINA. 29 customs duties. No new loans were allowed to be issued during the funding period, and surplus revenues were to be used to withdraw paper currency and to create a reserve for the retirement of this funding loan. Altogether £7,630,600 bonds were issued, and all not previously retired by sinking fund were paid off at par in the year 1906. Late in 1892 it was announced that owing to the condition of the public treasury a further readjustment of finances was requested, and a plan was put into effect whereby the interest on the 5 per cent loan of 1886-87 and on a loan known as the 5 per cent Buenos Aires water-supply and drainage- works loan (for £6,324,400, issued in pay- ment for waterworks contracts) was to be reduced to 4 per cent and the interest on the 6 per cent funding loan of 1891 to 5 per cent between July, 1893, and July, 1898. In accordance with the plan it was agreed that the interest on all other outstanding loans was to be paid 60 per cent in cash for the period from July, 1893, to July, 1898. Full interest on these loans was to be paid beginning with the latter year. Any surplus earned by the Government was to be used, first, to pay to the holders of the 1886-87 bonds the 1 per cent deducted during the five-year period; and, second, to pay to the holders of the 6 per cent funding loan a similar amount representing interest during the same period. The sinking funds on the various loans were not to be operated until January, 1901. Through efforts on the part of the Government the finances of the Republic were readjusted at a date earlier than was anticipated, and full interest payments were resumed one year before the expiration of the agreement. Interest on the 5 per cent bonds of 1886-87 for the period 1893 to 1898 was paid in full in 1898, and settlement was made with the holders of the 6 per cent funding-loan bonds on the basis of five-sixths of the amount unpaid. Sinking-fund operations were resumed as scheduled in January, 1901. During the period 1897 to 1900 the Government created various issues of 4 per cent bonds in settlement of national railway guaran- ties in arrears and for the settlement of the obligations of the Prov- inces of Buenos Aires, Santa Fe, Entre Rios, Tucuman, Cordoba, Catamarca, San Juan, San Luis, Corrientes, and Mendoza, as well as the city of Buenos Aires and the Santa Fe Railways. Bonds amounting to £31,870,890 were issued for this purpose, of which approximately £27,000,000 remain outstanding. These bonds are mostly held in Great Britain, France, and Belgium. A sinking fund of one- half of 1 per cent per annum, cumulative, is provided for the service of these loans. STEADY ADVANCEMENT IN CREDIT AND VALUE OF SECURITIES. Following the readjustment of its finances the credit of the Repub- lic steadily improved, and the value of its securities steadily advanced. In the years 1907 to 1911 several important loans were authorized. Although these were classed by the Government as internal loans, they were practically all sold abroad. The 5 per cent internal gold loan of 1907 was authorized to the ii mount of £7,000,000. These bonds were issued in London, Berlin, and Paris. 30 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. In 1908 the Government confined its financial operations to the issuance of £892,857 4 per cent gold bonds, which were subsequently turned over to the Argentine North Eastern Eailway as a portion of the cost of certain extensions. In 1910 £466,269 additional 4 per cent bonds were issued to this railway in part payment for its exten- sion to connect with the Paraguay Central Railway. In 1909 the city of Buenos Aires issued £2,976,180 bonds in London and Germany, secured by certain, taxes. These bonds were assumed in 1913 by the National Government. In 1909 the Government issued £10,000,000 5 per cent internal gold bonds— £2,960,000 in London, £3,400,000 in Paris, £1,640,000 in Berlin, and £2,000,000 in New York. A portion of the bonds offered in New York were resold abroad. The proceeds of the loan were used to provide for railways and other public works. The sinking fund is 1 per cent per annum, cumulative. A 5 per cent loan for £1,209,600 was also created in 1909, the proceeds to be used to purchase' the Gordoba & North Western Eailway for the Government. The offer- ing price was 101. During the year 1911 a 350,000,000-franc 4£ per cent internal gold loan was floated in Paris and Antwerp at 99| per cent, the proceeds to be used for certain public works. The sinking fund is 1 per cent per annum, cumulative. In 1913 an issue of £5,000,000 5 per cent bonds of the port of the capital (Buenos Aires) was authorized. Approximately £1,000,000 of these bonds were sold to provide for port extensions. In the same year £1,367,500 bonds were authorized, to be issued to the various railway companies for the construction of irrigation works. BONDS ISSUED DURING 1915. In 1915 the condition of the financial markets of Europe brought about by the war compelled Argentina to seek new channels in which to obtain funds" to carry out certain public works that were under way and to meet the necessary financial requirements of the country. The first issue made by the Government was for £5,000,000 and $25,000,000 treasury bonds of 1915. The sterling bonds were offered in London and the dollar bonds in the United States. The proceeds of the issue, which matures May, 1920, were used to retire £9,000,000 treasury bills and to pay for public works. The bonds were declared free from all present and future Argentine taxes, and after May 15, 1917, the sterling and the dollar bonds are interchangeable at the rate of $4.86 per pound sterling. Through this method of exchange a large portion of the bonds sold in Great Britain have been repur- chased by American investors. TOTAL BONDS OUTSTANDING — POSITION OF FOREIGN INVESTORS. Including the bonds issued during 1915 as above and the internal loans of 1907-1911, but excluding the assumed bonds of the city of Buenos Aires, there were outstanding December 31, 1915, a total of £70,797,702 bonds, the original issues of these having amounted to £86,192,658. Great Britain holds by far the largest amount of these bonds, the remainder being distributed in France, Germany, the Netherlands, Belgium, and the United States. Large additional amounts of bonds were sold in the United States during 1916 and SOUTH AMERICA ARGENTINA. 31 1917 — wholly short-term obligations. The purchase of these by American investors probably gives the United States second rank among the holders of Argentine external bonds, the American hold- ings now amounting to possibly one-quarter of the total. These bonds have found favor among American investors, and the public offerings have been generally oversubscribed. The holdings of the British, French, and presumably other European investors have largely been loaned to their respective Governments, and a large percentage of them represent collateral for loans made by these nations to carry on the present war. Argentine bonds in normal pre-war times have enjoyed great favor in Europe. During the period 1911 to 1914 'most of the 5 per cent issues sold as high as 104 to 106 per cent, the 4-| per cent bonds as high as 102 per cent, the 4 per cent bonds at 91£ per cent, and the 3£ per cent bonds at 86£ per cent. The following table shows the quotations of Argentine Govern- ment loans on the London Stock Exchange : Loans. Amount issued. Amount out- standing. High price since 19U.o • Price January 1918. 5 per cent of 1884 S per cent, 1886-87 5 per cent, 1887-88-89, Northern Central Railway extension 5 per cent, 1890, railway 5 per cent treasury conversion, 1887 41 per cent internal loan, 1888 41 per cent sterling conversion, 1888 3J per cent external, 1889 S per cent Buenos Aires water supply and drainage works, 1892 4 per cent railways guaranteed rescission 4 per cent of 1897 4 per cent of 1898 4 per cent of 1899 4 per cent of 1890 4 per cent of 1890, second series Port of Buenos Aires 5 per cent 5 per cent Internal gold loan, 1907 4 per cent bonds of 1908 5 per cent Internal bonds of 1909 5 per cent internal bonds of 1910 5 per cent port of the capital bonds 5 per cent irrigation bonds 4 per cent loan of 1910.. £1,683,100 8, 290; 100 3,968,200 2,976,000 624,000 3,953,700 5,263,560 2,659,500 6,234,400 11,603,100 6,746,031 1,527,778 3,035,736 2,825,515 2,649,663 2,000,000 7,000,000 892,857 10,000,000 1,209,600 5,000,500 1,367,500 466,270 £675,500 4,497,300 2,517,700 2,012,020 369, 800 2,453,080 3,405,460 1,327,680 4,717,080 9,080,100 5,811,692 1,316,088 2,614,616 2,583,855 2,281,062 1,445,000 4 2,409,760 780,400 12,795,920 1, 134, 100 996,200 1,153,100 303,600 104 106 104J 104 104 h 102 102 8SJ 105 961 91* 911 91* 911 91 105 1041 90 1041 105 103 103} 90 93 96 92 90 88 82 84 SI 97 81 68 68 08 68 68 89 81 68 84 86 84 84 67 • The par value of each of these bonds is £100 (see general text). Coupons on all of these issues are pay- able semiannually, the dates varying. * Outstanding balance of portion of issue quoted in London. INTERNAL, DEBT OF REPUBLIC. Not including the bonds that are classed by Argentina as internal debt but are held externally, there are outstanding approximately $2,500,000 bonds payable in gold and approximately $170,000,000 payable in currency. The principal issue is that known as the 5 per cent internal credit of 1905, bonds of which are outstanding to the amount of approximately $86,000,000 m/n. These bonds sell on the Bolsa (stock exchange) at Buenos Aires at approximately 88 per cent. The 5 per cent internal credit bonds of 1911 are outstanding to the amount of approximately $47,000,000 m/n. The health works loan of 1902 is next in importance, bonds outstanding totaling about $10,000,000 m/n. The two gold loans consist of approximately $2,100,000 o/s 4£ per cent loan of the guaranteed banks and 32 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. $500,000 o/s 5 per cent loan of 1891. These various loans are listed on the Bolsa at Buenos Aires and enjoy favor among the investors of Argentina. Few of them have found their way out of the country. CEDULAS OF NATIONAL MORTGAGE BANK. These "cedulas" are certificates to bearer issued by the National Mortgage Bank in lieu of cash to borrowers on various forms of real estate. A market has been created for these cedulas, so that the borrower may readily dispose of them for cash. The principal of these cedulas is paid off by means of an annual sinking fund, usually of 1 per cent per annum (series I is 4 per cent). Through- out the various other Republics of South America a similar system of loaning on real estate is in vogue. Many of the Argentine cedulas are held abroad. The first issue was made in the year 1886. when three currency issues to the total amounts of £1,746,053, £1,309,- 539, and £1,309,539, respectively, were brought out. The first of these issues was finally extinguished in 1906 and the second and third in 1910. These issues bore interest at the rate of 7 per cent per annum. Two series of £1,746,053 each were issued in 1888, and were finally extinguished through sinking funds in 1912. Gold series A was also issued in 1888, bonds to a total of £3,968,254 being brought out. The sinking fund was the usual 1 per cent per annum. Three other series of cedulas, F, G, and I, the former two dated 1896 and the last-named dated 1905, were extinguished in 1911 and 1912. These issues were for £1,309,539, £873,027, and £221,740. The cedulas of the National Mortgage Bank outstanding September 1, 1917, were as follows : Series. Interest rate. Amorti- zation. Original issue. Paid off. Owned by National Mortgage Bank. Amount in circulation. Per cent. 7 7 7 7 7 7 7 7 6 6 5 6 6 6 6 Per cent 1 1 1 1 1 1 1 1 4 1 1 1 1 1 1 Sm[n. 20,000,000 15,000,000 15,000,000 20,000,000 20,000,000 15,000,000 10,000,000 61,621,300 2,339,900 9,264,100 70,165,000 89,966,000 446,441,900 49,926,300 36,390,400 Sm/n. 20,000,000 14,337,900 14,575,450 17,303,250 17,424,930 13,135,300 8,664,800 47,987,100 2,148,000 6,117,800 40,373,150 35,999,650 58,460,700 1,962,475 72,600 tm/n. Smjn. B 662, 100 424,550 2,696,750 2,575,070 1,864,700 1,335,200 4,234,500 391,900 892,900 4,422,950 5,363,500 26,112,300 2,348,000 324, 800 C D E F G H 9,399,700 I J 2,253,400 25,368,900 48,602,850 361,868,900 45,615,825 35,993,000 K L Cedulas hipotecaria Argentina Second Law 9155: 881,314,900 298,563,105 53,649,220 529,102,575 . 5 1 Sojs. 20,000,000 Sols. 11,453,289 So's. 324, 261 Sols. 8,222,450 The approximate quotations on the Buenos Aires Stock Exchange for the above series as of September, 1917, were as follows : Series H, 105 ; series J, 97.50 ; series K, 88.50 ; series L, 99 ; cedulas hipotecaria Argentina, 96; new series, 1914, 93.50. The gold series (A) is converted into sterling at $5.04 to the pound, and the currency series at the same rate, with premium on SOUTH AMERICA ARGENTINA. 33 gold at the rate of 127.27- per cent, officially fixed by the conversion law of 1899. These cedulas are a form of investment very much in favor in Argentina. Large numbers of them are also held abroad, in Spain, Italy, Great Britain, Belgium, the Netherlands, etc. They are listed and comparatively active on the Bolsa at Buenos Aires and enjoy markets in Europe under normal conditions. It is estimated that the interest paid abroad on these cedulas during the financial year 1916 totaled approximately £1,965,000, or nearly three- fourths of the total interest paid on all outstanding issues. During the past two years, it is stated, a small amount of North American capital has sought this form of investment in the Argentine Republic, and it is not unlikely that future issues will find their way to the United States in increasing amounts. TOTAL EXTERNAL DEBT. The total outstanding debt of an external character, according to the Report of the Corporation of Foreign Bondholders, is as follows : . Character of securities. Original amount. Amount outstanding. £86,192,658 34,744,390 77,732,389 £70, 797, 702 30,219,122 47,378,356 Total 198,609,437 146,395,180 PROVINCIAL LOANS. PROVINCE OF BUENOS AIRES. The external loans of the Province of Buenos Aires, the original issues, and the approximate amounts outstanding are as follows: Loans. 3J per cent Sterling Loan ofl907 5 per cent Sterling Loan of 1908 4§ per cent Railway Loan of 1909 and 1912. 4§ per cent Loan of 1910 4J per cent External Loan of'1910 4i per cent Mar del Plata Loan of 1911 5 per cent La Plata Paving Loan of 1913 — 5 per cent Consolidated Gold Loan of 1915. 5 per cent External Gold Loan of 1910 Original amount. £11,160,980 1,500,000 3,375,015 2,000,000 3,500,000 611, HI 440, 878 1,047,620 Amount outstanding. £10, 1 3; i; 3, 060,980 417,020 304,055 935,440 381,032 611, 111 440, 878 541, 905 999,960 All loans issued by the Province of Buenos Aires prior to 1898 were in that year converted into 4 per cent bonds of the Argentine Government and appear under the special external debt of the Republic. The bonds are guaranteed by the Republic, but the Province of Buenos Aires is responsible to the nation and under obligation to refund the service to the Government. No attempt will be made in this report to review the early financial history of the Province. The 3£ per cent loan of 1907 was issued by the provincial govern- ment in exchange for cedulas of the Provincial Mortgage Bank. 63018"'— 18 3 34 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. The interest rate for the first five years was 3 per cent per annum. An extraordinary sinking fund to be derived from sums due the Mortgage Bank was to be used to retire bonds and after 10 years an annual cumulative sinking fund of one-half per cent was to go into effect. The financial crisis brought about at the beginning of the European war compelled the Province to arrange a scheme, with the bondholders whereby the latter would accept in payment for each 35s. semiannual coupon in 1915 10s. in cash and 25s. in 5 per cent funding certificates to be redeemable at par in 10 annual drawings commencing October, 1916. The coupons were to remain valid during the life of the funding certificates, and, in case of default in any of the conditions of the arrangement, the certificates were to be immediately receivable in payment of the territorial contribution and the produce tax of the Province, on which taxes the 3£ per cent bonds are a lien. The 1916 coupons, according to the arrangement, were to receive 15s. in cash and 20s. in funding certificates. The highest price recorded since January, 1911, for these bonds was 74£ per cent, and the lowest since the outbreak of the war was 33 per cent. In April, 1917, the price was 44 per cent. In March, 1915, the government of the Province announced that, in view of conditions then existing, it would be impossible to meet the interest and sinking fund on the 4J per cent loans of 1909, 1910 (French loan), and 1911 and on the 5 per cent loans of 1908, 1910, and 1913. The announcement further stated that the amortization of the loan would be suspended for two years and that the interest would be paid at the rate of 115 per cent into 5 per cent consoli- dated gold bonds, secured by a first charge on the taxes on alcohol and on commerce and industry, less a small portion already pledged for loans. The new bonds are redeemable by an annual sinking fund of 2 per cent commencing January, 1918. At the date of the announcement it was stated that the government would continue the service on the 4f per cent loan of 1910, issued in Berlin, Germany. This loan is secured on the $25,000,000 shares of the Bank of the Province of Buenos Aires (held by the government) and by certain taxes. The 5 per cent loan of 1908 was originally issued at 88 per cent, one-half in London and Berlin and one-half in Paris, to meet expenditures on drainage and canal works, etc. Its 1 per cent sinking fund commenced in 1910. The 4| per cent railway loan of 1909 and 1912 was issued, one- ihird in London at 88£ per cent and the remaining two-thirds in Paris, for the purpose of providing funds for the construction of two railways, one of which is assigned as security for the loan. The sinking fund of 1 per cent per annum commenced operations in November, 1913. The 1912 issue of the loan was made in Paris, making a total of 67,000,000 francs of this issue held in France. The 5 per cent external loan of 1910 was issued in London to pro- vide funds for certain public improvements. The remainder of the loans were marketed in Paris. They are secured by various taxes assigned for their service. SOUTH AMERICA ARGENTINA. 35 The high, low, and recent prices for certain of these provincial loan* since January 1, 1911, have been as follows : Loans. High. Low. Price Jan- uary, 1918. 3J per cent loan of 1907 5 per cent loan of 1908 4J per cent external railway loan 5 per cent external loan of 1910 S per cent consolidated loan of 1915 ». 74* 102 %i 101* M 56 o Issued to fund. The internal debt of the Province is subdivided into several bond issues, practically all of which are listed on the Bolsa at Buenos Aires. The approximate total of this debt is as follows : Loans. Total out- standing. Sinking fund. Price Sep- tember, 1917. 5 per cent School, etc., loan (1900) . . . 6 per cent Conversion loan 6 per cent "Mont-de-Pi$tg' ; loan 6 per cent School loan 6 per cent Health Works loan 5 per cent Bank of the Province loan 5 per cent Eoad Paving loan 5 per cent Paving loan 2J per cent Savings Bank loans Total I mill 2,205,800 7,504,450 35,325,250 5,749,100 8,837,000 12,596,920 7,924,000 1,125,200 8,246,400 89, 515, 120 Per cent. i 4 75.00 88.00 82.00 76.00 81.00 71.00 31.70 PROVINCE OF CORDOBA. This Province has outstanding an external loan, listed in London, which carries interest at the rate of 2§ per cent per annum until 1924, when the rate will be raised to 3£ per cent; the rates will then be advanced over a period of years to 3J and 4 per cent. The bonds sell at approximately 40 per cent, and the amount outstanding is £703,800. The bonds are dated 1887-89. PROVINCE OP CORRIENTES. This Province, in the year 1910, issued £396,825 of 6 per cent ex- ternal gold bonds in Great Britain and on the Continent. The British investors subscribed to approximately two-thirds of the total at 98 per cent. The loan is secured on railway mileage and on cer- tain taxes. In August, 1915, the Province was unable to meet its coupons owing to existing conditions. Other coupons have since been unpaid. The bonds sell at about 70 per cent. OTHER PROVINCIAL LOANS (INTERNAL). Several of the other Provinces of the Republic have, from time to time, been borrowers in the local markets of Argentina. Space will 36 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. not permit a full study of the finances of these Provinces. A few of these loans are : Loans. Dated. Interest. Sinking Cund. Price Sep- tember, 1917. Consolidated debt, Province of Santa Fe Consolidated debt, Province of Santa Fe School bonds, Province of Santa Fe Public building bonds, Province of Santa Fe Consolidated debt, Province of Entre Bios School bonds, Province of Entre Rios Public funds, Province of Entre Rios Pavement bonds. Province of Mendoza Internal -public debt, Province of Mendoza Internal -public debt, Province of Santiago del Estera Loan of the Province of Tucuman 1903 1903 1903 1909 1905 1909 1914 1914 1906 Per cent. 6 6 7 7 5 6 Per cent. 1 1 5 5 1 2 1 20 81.00 81.10 fl94.00 a 92. 50 ■68.90 61.00 50.00 '89.50 76.00 71.00 i> 89. 00 <■ Dec. 31, 1913. & December, 1912. In addition to these internal loans and others of like character, the Provinces of Santa Fe, Tucuman, Mendoza, and San Juan have "external loams outstanding. These are small loans, and, with the "exception of 6 per cent bonds of the Province of San Juan, the inter- est rate is 5 per cent. All the loans are provided with sinking funds of fromi one-half to 1 per cent. No recent quotations are available. A number of the Provinces are responsible ior the service of the 4 per cent provincial and municipal debt bonds of the Republic. A brief description of these financial operations has been given in the sectiom on national loans. In some instances security has been as- signed for the payment undertakings. MUNICIPAL LOANS. The principal municipalities of Argentina that have sought loans abroad are Buenos Aires, Bosario, and Santa Fe, all of which have been borrowers in the European markets. Buenos Aires has, nat- urally, been the largest borrower and has secured — largely in Great Britain— ^considerable sums for municipal improvements. The most important of the Buenos Aires loans are the following : Loan.?. Original amount. Amount outstand- ing. Original price. Price January, 191?. 4J per cent bonds of 1881 . 5 per cent loan of 1909 . . . 6 per cent loan of 1913-11 £1,984,120 a 2, 976. 180 4,960,300 £537,320 a 1,453,660 4,920.140 Per cent. Per cesU. 78 84 78 a The Government of Argentina has assumed this loan, which is secured by the proceeds from certain In addition to assuming the responsibility for the 5 per cent loan of 1909, the Government considers the outstanding balance of the $20,000,000 currency loan of 1891 among its internal obligations. The September, 1917, price for these bonds was 91.50. The Govern- ment is also responsible for the 6 per cent loan of 1897 (internal), SOUTH AMERICA ARGENTINA. a7 quoted at $91 m/n in September, 1917. city are as follows : Other internal loans of the Loans. Bate. Staking fund. Price, Septem- ber, 19117. Loan of 1882 Theater Colon loan. . Pavement loan, 1904.. Pavement loan, 1910. Municipal certificates Per cent. Per dent. 1 1 1 7 73 92 The municipality of Rosario has outstanding £1,982,775 bonds of an issue of £2,000,000 4 per cent gold external bonds, guaranteed principal and interest by the Province of Santa Fe. The bonds were originally issued in 1887 and in 1889, and were placed on a full in- terest basis in 1913. The direct tax of the Province of Santa Fe has been assigned as security. A recent price is 46 per cent. Two in- ternal loans are also obligations of the municipality. One bears in- terest at 7 per cent and has a sinking fund of 1 per cent, and the other bears interest at 6 per cent and carries a 2 per cent sinking fund. The latter bonds were quoted at 71.50 in May, 1915. In 1889 the city of Santa Fe issued bonds to the amount of £257,900 at 6 per cent. These bonds defaulted in 1891 but part of the arrears were made up through the issuance of £42,100 sterling funded coupo.ii bonds. From 1905 to 1915 interest was paid at the rate of 4 per cent per annum in Argentine currency, and from September, 1915, at the rate of 6 per cent per annum, also in currency. The latest £3 semi- annual coupon realized £1 6s. The bonds and the sterling coupon bonds were quoted, in January, 1918, at about 26 per cent of par (£100). The original offering price was 95 per cent. BANKS AND BANKING. Considerations of space will make it impracticable to give a fully detailed account of banks and banking methods in Argentina. Brief mention will be made, however, of a number of the important local and foreign institutions in the banking field, and the subject of bank- ing in the Republic will be discussed in a general way. The history of the banks in Argentina virtually began with the establishment of the Compafiia del Banco de Buenos Aires, on Sep- tember 6, 1822. The original capital consisted of 225 shares of the par value of 1,000 pesos, this amount being increased to 466 shares in the following year. A dividend of 18 per cent resulted from the first year's operations. In 1826 the bank was incorporated into the Banco de las Provincias Unidas del Rio de la Plata. In 1836 this somewhat unwieldy title was changed to Casa de Moneda, and later to Banco de la Provincia de Buenos Aires. Between 1862 and 1872 several banks began operations, among them the London & River Plate Bank. At the. close of the nineteenth cen- tury there were 42 banks of all classes in Argentina; by January 1, 1906, this total had increased to 67, and to-day the number is about 150. Employees of banks number more that 12,000. 38 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. BANK OF THE ARGENTINE NATION. The Bank of the Argentine Nation (Banco de la Nacion Argen- tina), with head 'offices at Buenos Aires and branches throughout the Republic, is the official Government financial institution. It dates from the year 1891, when it began business with a capital of $50,- 000,000 m/n. In 1905 the capitalization amounted to $100,000,000 m/n. At the present writing the capitalization stands at $128,000,000 m/n. Cash reserves amount to $39,672,331 o/s and $356,349,582 m/n, and deposits amount to $7,621,624 o/s and $785,403,037 m/n. The bank is allowed to make loans to no Government except that of Ar- gentina, and may loan to the National Government only to the extent of 20 per cent of its capital. The bank must hold on deposit a conversion fund, in gold, to which the Government contributes out of the revenues. This gold reserve is held against the paper currency which was issued previous to the passing of the conversion law and which remains in circulation. One-half of the profits of the bank is to be applied to the increase of capital and one-half is to be con- verted into gold to be credited to the reserve. The .following table illustrates the growth of the institution : Years. Deposits. Discounts and advances. Cash reserves. 1902. 1907. 1912. 1913. 1914. 1915 1917. to/a. 1,674,217 4,939.514 5.290,593 10,489,372 9,723,293 4,212,518 7,621,624 t m/n. 92,666,380 123,773,866 420,622,407 517,543,791 583,313,147 663,229,627 785,403,037 *0/l. 6,618 2,050,656 1,884,630 1,883,733 924,366 454,644 243,272 t m/n. 77,647,435 214,022,278 415,429,677 541,383,242 605,411,541 422,361,077 476,528,216 to/l. 8,244,892 18,618.100 37,802.050 32,272,702 28,641,226 10,759,652 39,672,331 tm/n. 42,790,796 55,075.452 130,660,991 180,056,991 194,147,851 379,135,455 356,349,582 CONDITION AND GENERAL CHARACTER OF ARGENTINE BANKS. The table on the next page shows the condition of the various banks doing business in the city of Buenos Aires on June 30, 1917: SOUTH AMERICA ARGENTINA. 39 81 sag. •a EH • ££« s©o -+■ r-iOI^CO « -. - - cocn -r S ' 5 i o 5 S ■■; o of nHwd'HrtV 42 p Op'tNMHtOCCN$fflH©N©NiH^CCr-00 , N©'*» MOT^anff.p:»HMn- .^i-ieo t-ieo fico cor»-^-< Sifs m us r~ a t*.0©NI>0 gi-ncoeooatccNgpcxxo^e 0)HWNM«OHHM« DOC t- Eg ooo> *oco (DCQ i— i os ■•£ c— Troiro^t'o^' - ic SosOMooHoor-ujc HHWNi'CiOOiOiC iCM0)O or-r- 5 3)N!OOMHC)Mfi ^"C HCONN OS HflM M00«0 fgggV -# r- CO U3 OS "* HNUNO 38 SSS OS CO CO OS I"" CO cocoes-* W P* COMOHH «5iH U3CO fc * p g^D■-JC^'0'*^lcc■fl■fe^s u =w"■'" Co (OOONUS'-'mHO'Ot'SCKOCOOO'CffiNiO ^ *i t « cc o 1^ h or.- c ■* OCM-lP OtHh-OCQCOiHCOOlQlOr .§■£.§ j OS V >h a g S > tifl < O 01 s s— 2° MM "■3*3 SS.2 a) OWJ §iP3lPlfdh«!itllg fri 6h 40 INVESTMENTS IN LATIN AMERICA AN» BRITISH WEST INDIES. The following table shows the condition of the Buenos Aires banks, taken together, at the end of each of the first six months of 1917 and at the end of June, 1916: Dates. Deposits. Discounts and overdrafts Cash balances. January 31, 1917 .. February 28, 1917 March 31, 1917.... April 30, 1917 May 31, 1917 June 30, 1917 June 30, 1916 to/s 15,422,449 15,281,050 16,998,576 19,422,635 17,518,861 17,313,607 14,646,695 tm/n 1,646,104,070 1,687,745,464 1,733,495,947 1,735,769,186 1,766,968,694 1,817,720,296 1,528,645,300 to/s 9, 116, 503 9,609,452 8,519,445 7,916,534 7,473,854 6,972,909 8,698,370 tm/n 1,298,281,275 1,348,115,864 1,344,081,602 1,350,447,209 1,349,527,413 1,367,293,765 1,219,014,825 to/s 45, 748, 181 53,533,475 59,444,981 63,096,179 61,126,544 60,716,285 28,268,521 tm/n 612,443,566 640,055,371 654,909,283 637,190,746 646,053,466 661,355,679 652,271,912 The issuance, exchange, and conversion of the paper currency of the Argentine Republic, is dealt with by the Government Office for the Conversion of Currency (Caja de Conversion ) s which is under the control of the Minister of Finance. This institution holds the supply of gold reserved as guarantee for the convertible value of the paper currency that it issues. Statements are regularly issued by the institution showing the total circulation of paper currency, the stock of gold in the Caja de Conversion and the amounts of gold deposited in foreign countries. As of June 30, 1917, it was stated that $261,- 592,511 gold was held in the Caja de Conversion and $55,254,373 abroad. Quotations and dividend records of several important local banks will be found in the Appendix (p. 497) among the lists of securities quoted on the Bolsa at Buenos Aires. Among the most important banks of the Republic is the Spanish Bank of the River Plate (Banco Espanol del Rio de la Plata), in which $98,065,340 m/n has been invested. The par value of the shares is $100 m/n, and a recent selling price was 115 per eent. The sub- scribed capital now amounts to $100,000,000 m/n (£8,730,158). The bank was established in 1882, the head office being located at Buenos Aires. There are 48 branches in the principal cities of Argentina, as well as 3 in Brazil (Rio de Janeiro, Santos, Sao Paulo), 1 in Montevideo, Uruguay, and 10 in Europe. The Argentine Popular Bank (Banco Popular) is another impor- tant local institution. The bank was established in 1887 and, as shown by the above table of deposits, etc., has become a power in the Argentine Republic. Previous to the war the bank paid dividends of from 12 to 14 per cent. For the fiscal year ended June 30, 1916, the rate was 9 per cent. The $20 m/n shares were quoted in Sep- tember, 1917, at $26 m/n. The Bank of the Province of Buenos Aires (Banco de la Provincia de Buenos Aires) , which, as already stated, is the oldest bank in the Republic, has its head office at La Plata and branches in Buenos Aires and elsewhere. The $100 m/n shares were quoted in Septem- ber, 1917, at $125 m/n, a rise of 17 points from the low price of the year. The dividend for the year 1916 was at the rate of 6^ per cent, as compared with 10 per cent per annum paid during the three years prior to the war. The New Italian Bank (JSTuevo Banco Italiano) is one of the most profitable banks in the Republic. It was founded in the year 1887, SOUTH AMERICA — ABGENTINA. 41 and its dividend record has been a most substantial one. In 1911, 20 per cent was paid; in 1912, 22 per cent; in 1913, 23 per cent; and in 1914, 18 per cent. The rate for the fiscal year 1915-16 was 12 per cent. The shares, which have a par value of $100 m/n, have sold be- tween 205 and 215 per cent during 1917. The Italian Commercial Bank (Banco Comercial Italiano), incor- porated in 1898, has for years paid moderate dividends. Its $100 m/n shares sold in September, 1917, at approximately par. The head office of the institution is in Buenos Aires. The important provincial banks of the Eepublic are : Banks. Date founded. Capitallzar tion. 1874 1884 1888 1888 1888 1889 1902 tm/n 2,426,734 33.254.481 3, 122, 121 '287J 490 6,429,931 ITALIAN COMMERCIAL BANK. The Italian Commercial Bank has been a most progressive institu- tion, as will be indicated by the following table : Years. Capital paid in. Deposits. Reserves. Divi- dends. 1899 tm/n 151.365 500,925 1,045,582 3,005,380 3,782,370 4,407,690 4,783,350 4,995,860 4,998,120 5,000,000 tm/n 171,934 1,119,210 4,067,839 6,908,885 7,944,419 10,633,792 11,335,995 10,714,219 14,849,066 618,070,675 im/n Per cent. 1904 1909 130,073 235, 179 305,722 501,729 654,547 748,729 789,919 c 700, 000 lfllO f 1911 1912 1913 1914 1915 5* 1917 a o April 30, 1917. 1 Also $515,614 gold. <• Year '910. Discounts and advances as of June 30, 1917, amounted to $87,537 o/s and $18,541,186 m/n. ARGENTINE POPULAR BANK. As a typical illustration of the development of banks in the city of Buenos Aires, reference may be made to the Argentine Popular Bank. This institution, founded in 1887, has increased its capital since the year of its incorporation from $980,500 m/n to $1,014,511 m/n. There are 3,505 holders of the bank's shares — 2,626 being of Argentinian nationality, 302 Italian, 226 Spanish, 390 British, 117 French, 75 Uruguayan, 44 German, 4 American, 3 Serbian, etc. Of the holders, 602 are merchants, 222 engaged in agricultural pursuits, 144 lawyers, 103 doctors, 62 engineers, 57 journalists, 531 engaged in domestic occupations, etc. In addition to its shares, the bank has outstanding approximately $930,000 o/s 5 per cent bonds and $1,472,- 42 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. 500 m/n debentures. The following table illustrates the increases in deposits and capitalization: Years. Deposits. Capital. Annual profits - 1888 tm/n 838,387 2,305,225 3,069,448 5,934,585 8,243,840 17,266,225 21,832,876 22,348,844 20,966,880 21,434,938 622,258,989 tm/n 980,500 1,121,980 1,754,140 2,823,100 4,603,380 9,732,720 10,073,300 10,509,860 10,519,520 10,515,180 10,514,511 tm/n 34,208 1893 ( c ) 1898 217,528 1903 ' (c) 1908 687,830 1912 (c) 1,594,573 1,531,681 1,080,972 1,098,672 1914 1915 1916 1917 a (c) a May 7, 1917. 6 Also $655,589 gold. c Not obtainable. The annual dividends paid during recent years on the shares of the Popular Bank have varied from 9 to 13 per cent. In 1915 and 1916 the annual rate was 9 per cent. As will be seen from the above table, the bank, since the outbreak of the European war, has shown de- creased profits and paid smaller dividends — a condition that has pre- vailed generally among the banks of Argentina. SPANISH BANK OF THE RIVER PLATE. As an indication of the general decrease in profits that followed the breaking up of the pre-war boom in Argentina, the earnings and profits of the Spanish Bank of the Kiver Plate — one of the strongest and best-managed institutions of its kind in the country — are shown (fiscal year ended June 30) : Items. 1915 1916 Net earnings Expenses; Profits Dividends, etc... Credit to P. & L tm/n 12,563,099 7,131,288 5,431,811 5,362,654 69, 157 tm/n 4,412,718 2,176,340 2,236,378 2,177,982 58,396 tm/n 5,497,241 2,725,481 2,771,760 2,726,201 45,049 During the year preceding the preparation of this report there has been a steady advance toward normal prosperity, as shown by the fact that the bank's shares were selling in September, 1917, at 11 5, an advance of 11 points as compared with the low price for the year. In 1914, before the war, the high price was 125. Between June 30, 1916, and April 30, 1917, deposits increased as follows : June 30, 1916 $149,256,145 m/n; April 30, 1917. $832,474 o/s and $174,960,192 m/n.' GERMAN TRANSATLANTIC BANK. It is interesting to note the deposits in the German Transatlantic Bank (Banco Aleman Transatlantic©) , which is much the largest and most important German bank in the field, for the years preceding and following the outbreak of the war. The table refers to deposits in Argentina only: SOUTH AMEEICA ARGENTINA. 43 Years. Deposits. Discounts. Reserves. 1906 tm/n 30,795,000 67,889,000 60, 057, 000 61,890,000 57,760,000 36,191,000 38,866,000 6 37,000,000 lm/n 41,602,000 58,690,000 65,400,000 66,880,000 60,735,000 35,698,000 33,700,000 6 27,000,000 i tm/n 9,869,000 1910 15, 130, 000 1911 16,960,000 17,975,000 1912 1913 19, 200, 000 1914 15, 341, 000 1915 13,380,000 614,500,000 1917" "April 30, 1917. 6 Estimated; approximately correct. The capital employed by the German Transatlantic Bank in Ar- gentina as of April 30, 1917, amounted to $3,650,000 o/s, equal to approximately $8,000,000 m/n. BRITISH BANKS IN ARGENTINA. The British banks in Argentina are: Banks. Capitali- zation. Reserves. Divi- dends. Approxi- mate capital in Argen- tina. Par value of shares. High price since 1911. Price Jan- uary, 1918. London & River Plate Bank £1,800,000 1,250,000 2,250,000 1,000,000 £2,000,000 1,400,000 1,500,000 1,000,000 Perct. 15 20 10 22 £900,000 450,000 1,000,000 900,000 <"£25 6 £15 a 20 610 a 10 65 "20 610 64 • 37, loj 32i 37 London & Brazil Bank ... Anglo-South American Bank 24 n 19 British Bank of South a Total amount that may be called. 6 Amount paid in. The British banks have been powerful factors in trade develop- ment between Great Britain and Argentina. Furthermore, as the dividend record shows, they have been highly profitable. During the great boom that reached its climax in 1913 three banks paid even larger dividends than at present. The London & River Plate Bank paid 20 per cent in each of the years from 1910 to 1913; the London & Brazil Bank paid 22 per cent in 1910; the Anglo-South American Bank paid 12 per cent in the years 1910, 1911, and 1912; the British Bank of South America is maintaining its maximum dividend rate, which, as indicated, is very substantial. Both the London & River Plate Bank and the London & Brazil Bank date from the year 1862: the British Bank of South America was founded in 1863 and the Anglo- South American Bank in 1888. The last-named institution holds an interest in the Bank of the Province of Buenos Aires, in the Commercial Bank of Spanish America, in the Bank of Peru & London, and in other banks. Although its largest business is in Chile, where 11 branches are maintained, the Argentine Republic claims a very substantial por- tion, there being 7 branches in that country (the most important, of course, being at Buenos Aires). There is also a branch in Monte- video, Uruguay. Nearly three-quarters of the London & River Plate Bank's South American business is handled in Argentina, where 14 branches are maintained. The bank's business during recent years 44 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. has been most excellent, although there was a slight reduction in profits in the early days of the war. The London & Brazil Bank is an institution that does its principal business in Brazil. Nevertheless, the two branches in Argentina handle a very substantial gross business and return a considerable profit. The bank maintains 14 branches, including 11 in Brazil and 1 in Montevideo, Uruguay. The British Bank of South America maintains two branches in Argentina, one in Uruguay, and three in Brazil; more than one-half of the business is handled by the two Argentina branches. OTHER FOREIGN BANKS. Among other nations represented in the banking field are Italy, France, the Netherlands, and the United States. The National City Bank, of New York, the American pioneer in the field, has steadily developed its Buenos Aires branch, as will be indicated by the fact that on April 30, 1917, the bank stood eighth in the total amount of deposits among the 26 large banks in Buenos Aires. Other American banks that have entered the field are the First National Bank of Boston and the Guaranty Trust Co. of New York. Many other American institutions have established close relations with existing banks in Argentina. INTEREST RATES PAID. The interest rates paid to depositors in Argentina are somewhat lower than in most Latin-American countries. The Bank of the Nation allows no interest on current accounts, 2 per cent on 90-day deposits, 3 per cent on 180-day deposits, 4 per cent on savings-bank deposits of at least 60 days' duration for amounts up to $5,000, and 3 per cent for amounts between $5,001 and $10,000. The London and Brazil Bank, Buenos Aires branch, allows 1 per cent on current accounts up to $200,000 m/n, 3£ per cent on three-months fixed deposits, 4 per cent on six-months fixed deposits and on savings-bank deposits, $10 to $10,000 m/n. This bank charges 9 per cent on over- drafts in accounts current, as compared with 8 per cent charged by the Bank of the Nation. The London & River Plate Bank and the British Bank of South America do not allow interest on current deposits. On fixed deposits at three months both institutions allow 3 per cent, and on fixed deposits at six months 3£ per cent is allowed. The savings-bank rate is 3 per cent. 1 INSURANCE COMPANIES. Argentina as an insurance field has attracted attention from all parts of the world. No fewer than 26 British companies are repre- sented in Argentina, as well as 3 German, 3 American, 2 French, and 1 each from Switzerland and Brazil. In addition to a number of 'Persons desiring additional information with regard to bankine in Argentina may be referred to two monographs previously issued by tbe Bureau of Foreign and Domestic Commerce. These are Special Agents Series No. 90, " Banking and Credit in Argentina, Brazil, Chile, and Peru," by Edward N. Hurley, and Special Agents Series No. 106, " Banking Opportunities in South America," by William H. Lough. These publications may be obtained for 10 and 20 cents, respectively, from the Superintendent of Documents, Government Printing Office, Washington, D. C, or from the district or cooperative offices ol the Bureau of Foreign and Domestic Commerce. See also the Appendix of the present monograph, page 538. SOUTH AMERICA ARGENTINA. 45 cooperative societies, there are 58 or more local companies handling various lines of insurance. Space will not permit a full description of these companies, arid mention will be made of only a few concerns. The following table will indicate the dividends paid in 1916 and the value of the shares of these companies : Companies. Approxi- mate capitali- zation. Par value of shares. Price of shares. . Divi- dend, 1915. tmln 1,500,000 700, 000 2,000,000 1,000,000 2,000,000 259, 075 tmln 50 100 100 5,000 100 100 tmln 117 Per cent. o20 275 12,000 10 10 8 15 o Rate for 1916; a similar rate was paid in 1915 and a similar or larger rate in previous years. Among the various other companies one may mention La America {average dividend 8 to 11 per cent), Espana & Rio de la Plata (average dividend 10 per cent), La Equiteva del Plata (average dividend 10 per cent), La Mundial (dividend 25 per cent), La Ro- sario (dividend usually 10 per cent), La Union Mercantil (dividend 10 to 12 per cent), La Sud America (dividend 10 per cent), and Union Comerciantes (fire and hail, dividend 22 per cent). These companies are capitalized at from $300,000 m/n to $2,000,000 m/n and are representative companies. Premium income for the year 1914 for the various companies amounted to $34,616,192 m/n, of which $22,828,435 m/n was earned by the local companies and $11,787,757 m/n by the foreign companies. The sums insured in 1914 amounted to $1,434,323,116 m/n for the local companies and $1,620,414,125 m/n for the foreign companies. Of this total, $1,183,395,030 m/n and $1,452,827,862 m/n represented fire insurance, and $72,727,147 m/n and $143,310,777 m/n marine insurance. Foreign insurance companies pay a higher rate of taxation on premiums, as well as a greater sum for trading licenses, than the local companies. . The former are also compelled to deposit the sum of $300,000 m/n with the Caja de Conversion or Banco de la Nacion as security for the fulfilment of their obligations. Additional sums must also be deposited in the event that more than one branch of insurance is to be handled. The $300,000 m/n may be in the form of bonds of the Government of Argentina. Foreign companies pay a tax of 2 per cent on life insurance and workmen's compensations, as compared with one-half per cent paid by the local companies. On fire, marine, and accident insurance the rate is 7 per cent for foreign companies and 1.4 per cent for local companies. There is no tax on agricultural insurance. The taxes paid by the insurance companies froduce an annual revenue to the Government slightly in excess of 1,000,000 m/n. In addition to taxes, as above, there are license fees varying from $2y000 m/n to $10^000 m/n. All the foreign companies have their main offices in Buenos Aires. Of the local companies 41 have their domicile in that city and the remainder in Rosar#}, Cordoba, Mendoza, Tucurnan, and elsewhere. 46 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. RAILWAY DEVELOPMENT. Argentina is provided with a system of railways, splendidly con- structed and well supplied with excellent equipment, that spreads its way throughout all settled sections of the Republic. Around this network of lines is built the economic structure of the entire Re- public. The growth and development of the railway lines is shown by the following table : Years. Length. Capital in- vested. Passengers. Freight. Receipts. Expenses. 1865 Mila. 155 1,563 5,861 10,292 17,392 19,619 19,793 20,805 "21,398 tol>. 5,379,898 62,964,486 321,842,815 541,575,623 900,430,051 1,084,600,000 1,120,210,000 1,210,475,331 1,236,723,022 747,684 2,761,570 10,069,606 18,296,422 59,014,600 67,457,432 73,212,084 80,279,940 81,745,535 Metric torn. 71,571 772,717 5,420,782 12,659,831 33,606,626 32,338,263 38,869,804 43,038,082 35,378,830 to/). 563,134 6,560,417 26,049,042 41,401,348 110,941,406 116,434,244 129,700,178 142,233,334 118,751,420 toll. 438,961 3,072,185 1880 1890 17,585,406 23,732,754 1900 1910 65,929,627 71,601,264 81,348,088 89,419,518 1911 1912 1913 1914 80,474,190 o As of December 31, 1917, approximately 22,500 miles of line were open for traffic. The valuation of the privately-operated railways is now placed at $1,219,846,313 o/s, while the lines owned by the Government repre- sent an investment of approximately $153,000,000 o/s. Great Britain has approximately $1,000,000,000 o/s invested in the privately-owned lines, while France has the next largest sum at stake. As of Decem- ber 31, 1915, there were 7,086 locomotives, 6,279 passenger-train cars, and 161,669 freight and service cars in service throughout the Re- public. All the successful railway lines in the Republic have their termi- nals either at Buenos Aires or at one of the other ports. This is the natural route of practically all traffic and will probably continue to be so for many years. The passenger density at Buenos Aires is very great, as may be gauged by the fact that no fewer than 500 out- bound passenger trains leave the city daily. The first railway in operation in Argentina was a 6-mile line ex- tending from Buenos Aires to San Jose de Flores, chartered Janu- ary, 1854, and constructed for the Sociedad Anonima del Camino Ferrocarril al Oeste. The line was opened to the public in January, 1857. The equipment consisted mostly of second-hand locomotives and cars that had been used at the siege of Sebastopol in the Crimea and had been constructed for an extremely broad gauge — namely, 5 feet 6 inches. The line was laid to accommodate these cars, and subsequent construction of this and other important railways has been carried on along similar lines. During the first year of its existence the 6-mile railway earned $19,185 gross, its expenses totaling $12,448. The road and equip- ment cost $285,108. To-day the railway forms an important part of the Buenos Aires Western Railway, which will be discussed here- after. The first really important railway line in Argentina was con- structed during the sixties by William Wheelwright, an American, famous as the founder of the Pacific Steam Navigation Co., and the builder of other railway lines in South America. This line, which SOUTH AMERICA ARGENTINA. 47 to-day forms a portion of the Central Argentine Railway, extends from Rosario to Cordoba, 246 miles. Most of the earlier railway lines carried guaranties of interest by the Government — some as high as 7 per cent per annum. In 1895 these guaranties were relinquished by mutual consent, the Govern- ment issuing to the railways 4 per cent rescission bonds in settlement thereof. These bonds are described in the section on Government loans. In 1907 the Government passed what is known as the Mitre law, whereby railways, in lieu of customs duties and national and pro- vincial taxes until 1947, pay to the Government 3 per cent of the net receipts, based on 60 per cent working expenses. This sum is used wholly to improve and construct roads and bridges to and from stations in the towns and districts served by the respective railways. The Government has the right to alter tariffs if the gross earnings of the railway, with operating expenses at 60 per cent, exceed 17 per cent on the recognized capital tor three consecutive years. The railway lines of Argentina have the right to construct exten- sions or branch lines, not to exceed 75 kilometers (47 miles) in length, without having to apply to the Government for permission, provided these lines are not within 20 kilometers (12^ miles) of any existing railway line belonging to another company. Several of the railways have taken advantage of the right to construct irrigation works adjacent to or near their lines, receiving payment therefor in Government 5 per cent bonds at par. Owing to the increased cost of operation, the Government, late in 1917, granted permission to the railways to increase their tariffs 22 per cent. CENTRAL ARGENTINE RAILWAY. In discussing the important subject of railways it is necessary to give a brief history of the development of several of the most im- portant systems of the Republic, beginning with the lines converging at Buenos Aires. Mention will first be made of the Central Argen- tine Railway. This is one of the longest and most important of the railways, serving as it does the larger cities and towns of the north- ern and central sections of Argentina, including Buenos Aires, Ro- sario, Cordoba, Santa Fe, Tucuman, etc., and crossing some of the best grain and cereal lands in the country. The railway to-day has a mileage of 3,305 and possesses the finest station and terminal in South America. From this, the Retiro Station, the main trunk line extends northward to Tucuman, a distance of 720 miles, running through the Provinces of Buenos Aires, Santa Fe, Santiago del Estero, and Tucuman. A number of divisional lines extend into the Province of Cordoba or act as feeders throughout the Provinces mentioned. As previously stated, William Wheelwright, of the United States,, constructed the Rosario-to-Cordoba section of this railway. He requested the concession at as early a date as 1854 and carried out a survey of the line under the supervision of Allan Campbell, also an American. Mr. Campbell's name is also identified with various early railway projects on the west coast of South America. Owing to the difficulty of obtaining financial aid, it was not until 1863 that the construction of the line was begun. The first section was com- pleted in 1864 and the line to Cordoba in 1870. 48 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. From this somewhat modest beginning the system has been ex- tended year by year. In 1903 the Buenos Aires & Kosario Railway was acquired, although the Government did not sanction the acqui- sition until 1908. This increased the mileage of the railway to 2,400 miles, and since that date another 900 miles has been added. At the outbreak of the war the company was carrying out an elaborate program of extensions. This expansion work has for the moment been curtailed but will doubtless be resumed when peace is established in Europe. The principal freight traffic consists of cereals, but sugar, timber and firewood, live stock, wool, hides, hay, lime, and numerous other articles are also handled. The passenger traffic is very heavy, especially the suburban traffic. In view of this fact it was decided to electrify the lines adjacent to Buenos Aires for approximately 28 kilometers" (17 miles). The system adopted provided for the mul- tiple unit, third rail, and direct current, 800 volts. The company maintains its own power plant. Extensive workshops are maintained at Bosario and Perez, the latter only recently constructed. The Retiro Station at Buenos Aires has a frontage of 160 meters (525 feet) on the Avenida Maipu. The train shed contains 74,000 square meters (796,536 square feet), and 1,937 passenger trains are handled during one week at this terminal. The annual average number of passengers handled at the station exceeds 9,000,000. There are a total of 409 stations on the railway and the equipment totals 679 locomotives, 787 passenger-train cars, 18,592 freight-train cars, and 836 service cars. Through express passenger service is maintained between Buenos Aires, Rosario, Tucuman, etc., and con- nections are afforded with the through Government line running to the Bolivian frontier at La Quiaca. The record year's passenger traffic was in 1913, when 21,721,273 passengers were carried— an average of 59,570 per day. About 9,000,000 tons of freight are handled, as well as about 2,000,000 head of cattle and other live stock The growth of this great system during recent years is illus- trated by the following table : Items. Increase. Average miles operated Number of passengers carried Tons of goods carried o Tons of live stock carried Gross receipts Net receipts Train miles Accumulated reserve funds 2,316 7,070,289 3, 939, 757 300,932 £2,796,296 £1', 389, 072 5,042,089 £643, 897 Per cent. 2,994 29.3 21,721,273 207.2 9,449,209 139.8 654,893 117.6 £6,489,346 132.1 £2,770,411 99.4 10,314,245 104.6 £2,173,138 237.5 o Includes company freight. & June 30, 1912; amount larger on June 30, 1913. During the years 1911-12 to 1917-18 the gross receipts have been as follows : Years. Average miles operated. Gross receipts. . Years. Average miles operated. Gross receipts. 2,870 2,994 3,151 3,286 £5,223,815 6,489,346 6,058,140 5,755,254 1915-16 3,304 3,305 3,305 £5,737,093 5, 237, 700 K,15S,280 1916-17 1917-18 1914 15 SOUTH AMERICA ARGENTINA. 49 The capitalization of the company consists of £28,196,950 consoli- dated ordinary stock, £811,800 deferred stock, £9,695,715 preference 44 per cent stock, £13,436,764 debenture stock (4 per cent) , £113,564 Central debenture stock, £2,017,500 Western annuity, $15,000,000 6 per cent notes (sold in the United States) , and £500,000 6 per cent five-year notes, due September, 1922. For several years prior to the outbreak of the war in Europe dividends of 6 per cent; were paid on the consolidated ordinary stock. This has been subsequently reduced. The 6 per cent notes sold in the United States are dated February 1, 1917, and due February 1, 1927. They are payable in United States gold and are convertible into consolidated ordinary stock at par. The issue was offered by a syndicate of American bankers at par and interest. In July, 1918, they were quoted at 81. The gauge of the railway is 5 feet 6 inches, the rails in the main track are of various weights up to 90 pounds, and the ties are of steel and hardwood. Central Argentine consolidated ordinary stock, listed on the Lon- don Stock Exchange, sold as high as 120 in 1906 and above 110 on several occasions between 1910 and 1914. At the closing of the stock exchange July 27, 1914, the price was 92. In January, 1918, the price was 60. The deferred stock sold January, 1918, at 40 — a price far below normal. The lack of a market outside of London has been a partial cause of the general decline in the company's securities. The 4 per cent debenture stock sold as high as 109^ since 1911; the price January, 1918, was 70. (par £100). BUENOS AIRES GEEAT SOUTHERN RAILWAY. Equal in importance to any of the railways of Argentina is the Buenos Aires Great Southern Railway (which, like most of the large systems, is British owned), operating approximately 3,792 miles of road, extending from Buenos Aires to the south and southwest through vast areas of rich country fully or partly developed. The railway was first opened for service late in 1865 between Buenos Aires and Chascomus, 114 kilometers (71 miles). At that period the railway owned 5 locomotives, 19 passenger cars, and 124 other cars, and the capitalization was £750,000. To-day the system has grown to a total mileage of 3,793, with 679 locomotives, 739 passenger cars, and more than 16,000 other cars (including baggage cars). The capi- talization is £53,838,090. Upward of 90 per cent of this company's mileage is in the Province of Buenos Aires, the richest Province in the Argentine Republic. The railway reaches such important cities or ports as La Plata, Bahia Blanca, Mar del Plata, Ingeniero White, etc. The freight station, Sola, is the largest in South America, with a capacity for the storage of 230,000 bags of grain and 2,000 tons of other freight. The port of Ingeniero White, near Bahia Blanca, is equipped by the railway with a number of up-to-date electrical elevators for grain. There are seven loading belts on each side of the various elevators, capable of loading 300 tons per belt per hour, or 4,200 tons per elevator. By this method about 6,000 tons of grain can be handled i n eight hours. Extensive shops and foundries are owned by the railway, and the line is laid with heavy rail and equipped in a thoroughly modern manner. 63018°— 18 4 50 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. During recent years the company has constructed an -important ex- tension from Bahia Blanca westward through the plains of northern Patagonia to Neuquen and Senilossa, 480 miles. From this latter point an extension is projected to Pino Hachedo Pass, on the bound- ary with Chile, where connections will be afforded with a line to be constructed by the Chilean State Railways. This will complete a transcontinental system, with easy grades. Branch lines are to be constructed on this extension to Rio Colorado and Darwin, south- ward through the Province of Rio Negro, to Port San Antonio on the Gulf of San Matias, where a connection will be afforded with the Government's Patagonia Railway, partly constructed and projected to cross central Patagonia and extend southward to Lake Argentine, etc. The new line of the Buenos Aires Great Southern Railway to Neuquen and Senilossa is handling an excellent traffic, particularly in cattle. Important irrigation works have been carried out by the railway in the Rio Negro and Neuquen Valleys. The Buenos Aires Great Southern Railway has its passenger ter- minus at Plaza Constitucion Station, Buenos Aires. Here approx- imately 350 trains are handled daily, including a number of express and de luxe trains to Mar del Plata, Bahia Blanca, etc. Between 25,000,000 and 30,000,000 passengers are handled annually in normal years. In 1913, a normal year, the railway also handled 6,592,581 nead of live stock, 1,744,572 tons of wheat, 998,000 tons of maize, 837,000 tons of oats, 227,000 tons of potatoes, 922,000 tons of lime and stone, and 2,531,000 tons of general freight. The following table shows the earnings of the system since 1906-7: Years. Average miles operated. Gross receipts. Years. Average miles operated. Gross receipts. 1906-7 2,613 2,613 2,716 2,770 3,044 3,380 £4,254,009 4,442,376 4,649,499 4,601,924 4,988,380 5,404,096 1912-13 3,544 3,655 3,763 3,792 3,792 3.792 £6,569,345 5,464,588 1907-8 1913-14..... . 1908-9 1914-15 4, 941, 621 1909-10 1915-16 5, 549, 140 5, 728, 000 1910-11 1916-17 1911-12 1917-18 5,816,000 The capitalization of the company consists of £20,090,000 ordinary stock, £8,000,000 5 per cent preference stock, £15,472,560 4 per cent debenture stock, £1,032,930 debenture stock (44, per cent), issued to the Buenos Aires Western Railway in payment for the Saladillo Branch, and £242,600 4£ per cent debenture stock issued to the Buenos Aires Western Railway on account of the purchase of the Brandzen branch. The fixed interest-bearing obligations of the company form only one-third of the capitalization, and the margin of safety even in poor years is very large. The ordinary stock for- merly received 7 per cent per annum in normal years, this rate being maintained for many years to 1912-13. In 1913-14 the rate was 5 per cent, and in 1914-15 it was 4 per cent. From the profits of 1915-16 the dividend declared was 4| per cent. These shares sold as high as 148f in 1905, above 125 every year thereafter to 1913, and at 120 in 1914. At the closing of the London Stock Exchange, July 27, 1914, the price was 102. By April, 1916, the stock had de- clined to 80, and in January, 1918, had reached the price of 70. The excellent property that this stock represents would lead one to be- lieve that the stock is on the " bargain counter." There have been SOUTH AMEKICA ARGENTINA. 51 heavy declines in all the other securities of the company. Most of these securities have been loaned to the British Government as part collateral for war loans. This company is said to have more than 100,000 stockholders on its books. Its London office is at Kiver Plate House, Finsbury Circus. BUENOS AIRES & PACIFIC RAILWAY AND ITS ACQUISITIONS AND EXTENSIONS. Another of the great broad-gauge lines converging at Buenos Aires is the British-owned Buenos Aires & Pacific Kailway. This company has been the most adventurous and ambitious of the various railways, and, as a result, operates the principal units of the only transcontinental line in South America. The company was formed in 1882 in London to purchase from the Argentine Government a line extending from Mercedes to Villa Mercedes. In 1886 an ex- tension from Mercedes into Buenos Aires, 425 miles, was completed, and in 1900, 473 miles of additional lines were undertaken, these being completed between 1902 and 1907. In 1904 the Bahia Blanca & North Western Eailway was acquired under a lease agreement. This line extends from Toay, a station on the "Pacific's" line, to Bahia Blanca, 231 miles, where important terminals and docks are owned. This terminal at tidewater, owned by the company, is known as Port Galvin and is built of masonry. Eight ocean steamers, each drawing 25 feet of water, may be accommodated, as well as one ship drawing 30 feet. Elevators with storage capacity of 18,000 tons, a produce market, sidings, electric cranes, and various other facilities are also owned. The Bahia Blanca & North Western Eailway, after its acquisition, was extended (in the year 1907) to form a link in the route between Bahia Blanca and Mendoza — this extension, Nueva Bbma to Huinca Renanco, being 287 miles in length. Various feed- ers and branches have since been thrown out from this and the main line, increasing the existing mileage to nearly 900 miles. The capitalization of the Bahia Blanca & North Western Railway is as follows: Stock. Amount outstanding, High price since January, 1911. Price January, 1918. 1. Guaranteed stock 2. 4i per cent guaranteed stock 3. 4 per cent first debenture stock, redeemable 4.4! per cent second debenture stock, redeemable £1,350,000 3,250,000 2,450,000 3,000,000 103 101 103J 63 64 67 The guaranteed stock (1) received dividends of 3 per cent per annum from 1904 to 1908, Z\ per cent from 1909 to 1912, 4 per cent from 1913 to 1916 (July) ? and 4J per cent thereafter. Wheat, barley, oats, wine, maize, cattle, sheep, and general mer- chandise form the classes of freight handled by the Bahia Blanca & North Western Eailway. The passenger business is not large in comparison with the freight earnings. The record year's business was in 1912-13, when gross earnings amounted to £836,036. The an- nual rental received by the company from the Buenos Aires & Pacific Eailway amounts to about £450,000. 52 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The Buenos Aires &' Pacific Kailway operates under agreement the Villa Maria & Rufino Railway, extending from Rufino on its line to Villa Maria, where junction is afforded with the Central Argentine Railway. Dividends of 4| per cent are guaranteed on the £393,750 stock and interest on the £673,500 4 per cent first debenture stock. These securities sell at about 67 and 65, as compared with 91 and 94, the high prices during recent years. The length of this railway is 141 miles. The lease expires in 1920. The largest gross earnings during recent years were £77,308 in 1911. During the year 1907 the Buenos Aires & Pacific Railway, deciding to continue its policy of expansion, leased the Argentine Great West- ern Railway, extending from Villa Mercedes,, then the terminus of the " Pacific " line, to Mendoza, the most important city of western Argentina and. the center of a rich wine-producing country. The Great Western Railway as it then existed had a length of 535 miles ; to-day, owing to the construction of a new low-grade line and addi- tional branches, the mileage totals about 950. The railway was origi- nally built in 1885 and was acquired in 1887 by an English company. , The lease agreement between the Buenos Aires & Pacific Railway and the Argentine Great Western Railway provides that the Great Western 5 per cent cumulative preferred stock shares pro rata with the " Pacific's " first preference 5 per cent stock in all dividends up. to. 5 per cent per annum and will share pro rata with the latter s- ■ordinary stock for dividends between 5 and 6 per cent ; when this ordinary stock receives 7 per cent the rate on the Great Western's preferred stock will be 6J per cent, which rate will be increased to 7 per cent in case dividends of more than 10 per cent per annum are paid on the " Pacific's " ordinary stock. The Great Western's ordi- nary stock shares equally with the "Pacific's" second preference stock up to 5 per cent and shares for additional dividends with the " Pacific's " ordinary stock under conditions similar to those govern- ing the preferred stock, as above. Interest on all debenture stock issues is guaranteed by the " Pacific." Dividends on the preference and ordinary stocks of the Great West- ern were maintained at the rate of 6 per cent per annum .prior to the fiscal year 1908-9. In that fiscal year and subsequently, to and including 1913-14, the rate was 5 per cent on each class. In 1914-15 the rate was 5 per cent on the preference stock and 56s. 6d. on the ordinary stock. For 1915-16 the rate was 5 per cent on each class. The capitalization of the Great Western is as follows : Stock. Amount outstanding. High price since January, 1911. Price January, 1918. Ordinary stock 5 per cent cumulative preference stock 4 per cent perpetual first debenture stock . . . 4 per cent perpetualsecond debenture stock 5 per cent redeemable debenture stock £2,125,000 2,125,000 1,700,000 1,700,000 3,600,000 110 116 105 102 116 49 70 64 79 11,250,000 SOUTH AMERICA ARGENTINA. 53 In the year 1909 the " Pacific " purchased from the National Gov- ernment a line known as the Andine Railway, extending from Villa Mercedes to Villa Dolores, 215 miles. This line has been incorporated directly into the system. The Argentine Transandine Railway, a meter-gauge line of 111 miles, which forms a part of the mountain section of the ocean-to : ocean route, was acquired in 1907. This line extends from Mendoza up the mountain slope to the Chilean bound- ary, reached at an altitude of over 10,000 feet. The great tunnel connecting Argentina and Chile is 2 miles in length and cost a very large sum. Its date of completion, after several years of construc- tion, was 1910. The Argentine Transandine line was originally surveyed by John and Matthew Clark in 1873. Several years prior to that date these brothers had surveyed a route for a transcontinental telegraph line and at that time had conceived the idea of a through railway follow- ing approximately the route later adopted. It was not until 1886 that a company was formed to construct the mountain section of the through route. This company was known as the Buenos Aires & Val- paraiso Transandine Railway, the name subsequently being changed to the Argentine Transandine Railway. A total of 91 miles of the line, Mendoza to Puenta del Inca, was constructed prior to December 31, 1893. It was not until April 16, 1910, that through trains were operated across the continent. The Transandine is capitalized approximately as follows : Stock. High price since January, 1911. Price, January, 1918. iper cent "A." debenture stock (guaranteed principal andinterest by the "Pacific") 4 per cent " B " debenture stock (interest dependable on income is regu- larly paid) 7 per cent cumulative preferred stock (£387,500 dividends in arrears to Dec. 31, 1917) 7 per cent deferred stock (no dividends) Total capitalization £310, 166 310,166 500.000 350,000 83 »20 65 55 1,470,332 a Par £20. The preferred stock has received only 6 per cent in dividends since 1906, the last dividend of 3 per cent having been paid in Decem- ber, 1913. In addition to the various acquisitions and extensions enumerated in the preceding paragraphs, the Buenos Aires & Pacific Railway has otherwise extended and double-tracked the system in various places. An important extension has been constructed, known as the Patagonas Extension, extending from Bahia Blanca southward to Carmen de Patagonas, 167 miles, at the mouth of the Rio Negro. This will give the system access to northern Patagonia. Land is be- ing irrigated along the Patagonas division by means of canals brought from the Colorado River, and the " Pacific " is making en- deavors to attract colonists to the district. 54 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The earnings of the entire Buenos Aires & Pacific Railway, cover- ing a period of years, have been as follows : Years. Average miles operated. Gross receipts. Years. Average miles operated. Gross receipts. 1910-11 3,114 3,240 3,404 3,473 £4,820,841 4,976,651 5,590,613 4,881,665 1914-15 3,527 3,535 3,535 3,535 £4,538,943 4,645,000 4,414,000 5,221,000 1911-12 1915-16 1912-13 1916-17 1913-14 1917-18 The company is capitalized as follows. (not including the capitali- zation of the Argentine Great Western Railway, the Bahia Blanca & North Western Railway, and the Argentine Transandine Railway) : Stock. Eate. Amount outstanding. High price since 1911 Price, January, 1918. Ordinary stock First preference stock (cumulative) Second preference stock (noncumulative). Perpetual first debenture stock Redeemable second debenture stock Consolidated debenture stock Debenture stock Per cent. •1 5 65 4 a 4i 5 £10, 1, 1, 000,000 200,000 000,000 925,000 075,000 942,673 000,000 101 115 107 106 108 108 107 40 70 51 71 71 70 75 Total. 27,142,673 « See paragraph below for dividend rates. 6 Compares with 56s. 6d. in 1914-15 and 5 per cent per annum in previous years. Guaranties and other forms of rent paid by this company to leased and controlled lines amount to nearly £1,000,000 per annum. According to the figures in the annual report of the company for the year ended June 30, 1916, the income account showed the fol- lowing results: Operating revenue, £4,655,019; operating expenses, £2,846,986; net revenues, £1,808,033; other income, £241,000; net in- come, £2,049,033; fixed charges, £1,621,000; surplus, £428,033. Despite the handicap of heavy guaranties and relatively large fixed charges, it may be said that this property is a magnificent one. It may possibly be a little ahead of its time, but following the influx of settlers after the end of the war in Europe, the country traversed by the line is certain to develop with considerable rapidity. The dividend rate on the ordinary stock has been as follows: To and including 1908, 7 per cent; 1909, 5 per cent; 1910, 3 per cent; 1911, Bi per cent; 1912, 2 per cent; 1913, 3 per cent; 1914-15, none; 1916, \ per cent. BUENOS AIRES WESTERN RAILWAY. This system, which has had probably the longest record of con- tinuous prosperity of any railway in the Argentine Republic, stands fourth in importance. Its present mileage is 1,870, and it has the distinction of being the outgrowth of the oldest system in Argentina. The line extends westward from Buenos Aires into the districts of Pampa and San Luis, and it is primarily a freight-carrying road SOUTH AMERICA ARGENTINA. 55 although a Very substantial passenger business, is handled and a large passenger terminal is owned — the Once Station, in the heart of Buenos Aires. An extensive goods tunnel carries the freight to the port, and the passenger station is ' located directly on the Anglo- Argentine Subway, affording quick connections with the business sections of the city. A portion of the suburban lines is operated by electricity. Plans are laid for the construction of a large mileage of branches and feeder lines. Jointly with the Buenos Aires Great Southern Railway, the " Western " has leased the Buenos Aires Midland Railway, extend- ing from a suburb of Buenos Aires to Carhue, 320 miles. Three per cent per annum was guaranteed to the shareholders (both classes) from 1914 to June 30, 1916, the rate thereafter to be 4 per cent per annum. The Buenos Aires Western Railway paid to the Midland in 1915-16, as per working agreement, the sum of £68,296. The capitalization of the Midland consists of £500,000 ordinary stock, £1,000,000 preference stock, par value £1, which sells (January, 1918) at approximately 13s. per share, and £1,559,010 4 per cent debenture stock, selling (January, 1918) at about 69 (high since 1911, 105 per cent). The full amount of rental has not thus far been earned by the company. Prior to the date of the lease a large majority of the ordinary stock was owned by the two lessees. During the year 1912-13, in which record earnings were shown, the Buenos Aires Western Railway carried 7,345,845 head of live stock, 2,896,015 tons of freight, and 11,462,842 passengers. In 1914-15 a total of 8,830,106 passengers were handled, and in 1915-16 the number decreased to 8,138,189. The live stock handled during these two fiscal years numbered 7,018,867 and 6,781,262, and the freight tonnage was 2,089,975 and 2,049,096. Gross receipts covering a period of years have been as follows : Years. Average miles operated Gross receipts. Years. miles operated. Gross receipts. 1907-8. 1908-9. 1909-10 1910-11 1911-12 1912-13 1,219 1,305 1,365 1,586 1,659 1,781 £2,205,237 2,296,860 2,300,510 2,634,186 2,425,683 2,906,008 1913-14 1914-15, 1915-16. 1916-17. 1917-18 1,792 1,867 1,870 1,870 1,882 £2,529,178 2,522,682 2,714,622 2,513,000 2,865,000 Wheat, maize, hay, and other agricultural products form the bulk of the traffic handled. For a long period prior to 1910-11 the dividend rate on the ordi- nary stock was 7 per cent per annum; in 1910-11, 7 per cent and \ per cent extra was paid; in 1911-12 and 1912-13 the rate was 7 per cent; in 1913-14, 1914-15, and 1915-16, 5 per cent per annum was paid. Rolling stock in service June 30, 1916, consisted of 347 locomotives, 432 passenger-train cars, 9,341 freight-train cars, and 184 service cars. 56 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. Quotations on the various securities of the company follow: Securities. Kate. Amount outstand- ing. High price since January, 1911. Price January. 1918. Preference shares (£10 par) Do Ordinary shares Government bonds, 1888 issue Debenture stock Terminable (1925) debenture stock. Per cent. 4J 5 5 5 4 £2,552,340 300,000 17,347,660 1,000,000 7,872,203 1,000,000 "Hi "12J 135 (*) 105 m 7 8 71 72 94 Capitalization. 30,072,203 "Par £10. 6 This issue is not quoted. The Buenos Aires Western Eailway is an excellent property and has been kept in a high state of maintenance, despite the traffic losses due to the business depression throughout the Republic. Its territory is an extremely rich one and its management is of the best. CORDOBA CENTRAL RAILWAY. This British-owned system is the result of the amalgamation of five different lines, four of which were at one time operated by sepa- rate companies. These lines were distinguished as follows : Cordoba Central Original Line ; Cordoba Central Eailway Central Northern Section ; Cordoba Central Railway Buenos Aires Extension ; Cordoba & Rosario Railway ; Argentine North Western Railway. The Original Line was constructed following the acquisition of the concession in 1888 by the present owners. This section is about 129 miles in length and extends from the city of Cordoba to the town of San Francisco on the eastern boundary of the Province of Cordoba, connection being afforded at the latter place with the Province of Santa Fe Railway and with the Cordoba & Rosario Railway. At Cordoba connections are afforded with the Government's Argentine Northern Railway and with the Cordoba Central Northern Exten- sion. The country served by this division is prosperous and well settled, and this is probably the most important section of the system. The Central Northern Section was originally known as the Central Northern Railway and was built following the granting of the origi- nal concession in 1871. The railway was acquired by its present own- ers in 1889. Its present length is 546 kilometers (339 miles) , and it extends from Cordoba northward to Tucuman. There are two im- portant branch lines, one extending from Recreo to Chumbicha, 176 kilometers (109 miles), and the other from Frias to Santiago del Estero, 162 kilometers (101 miles). At Tucuman the main line con- nects with the Central Northern Railway (Government), which runs northward to the Bolivian frontier and will eventually afford direct connections with a through line to Oruro and La Paz. The gauges on the Government line and on the Cordoba Central are the same (1 meter). A large tract of sugar country is traversed. Timber, cattle, stone, lime, and salt are also important items of traffic. The Cordoba Central Buenos Aires Extension was constructed fol- lowing the granting of a concession in the year 1903 and forms a through extension of the system from Rosario to Buenos Aires, 300 SOUTH AMERICA — ARGENTINA. 57 kilometers (186 miles). The line was opened for provisional traffic, in 1909 and for all traffic in 1912. The extension, although quite costly, will probably in time prove of great benefit to the system, providing, as it does, an outlet for through traffic to Buenos Aires. Once the small mileage of uncompleted track is laid in Bolivia, this line will form the southern terminus of a direct through system be- tween La Paz, Oruro, and Uyuni on the north and Buenos Aires on the south. Furthermore, no change of gauge will be necessary. The Cordoba and Bosario section, extending between these two points, was the result of a concession granted in 1886. The section handles a substantial traffic in cereals, destined for exportation from Bosario and Buenos Aires. This is a most important division. The northwestern division passes through large sections of the sugar lands in the north. While not the most important of the vari- ous sections, it nevertheless furnishes considerable traffic. The capital invested in the enterprise to June 30, 1915, amounted to £20,419,222. The mileage as of that date was 1,186 and the num- ber of stations 143. There were 297 locomotives, 314 passenger cars, not including the baggage equipment, and 7,383 other cars. There were carried during the year 2,199,893 passengers and 2,778,527 tons of freight. A table of earnings over a period of several years is here given: Years. 1909-10 19)0-11 1911-12 1913-13 1913=14 Average miles operated. 1,149 1,170 1,172 1,176 1,184 Gross receipts. £911,605 1,000,371 1, 199, 243 1,363,700 1,347,998 Years. 1914-15 1915-16 1916-17 1917-18 Average miles operated. 1,186 1,186 1,205 1,205 Gross receipts. £1,202,625 1,543,991 1,562,000 1,701,700 The capitalization of the Cordoba Central Eailway is as follows : Securities. Amount outstanding. High price since 1911 Price January, 1918. Ordinary income stock -• 5 per cent cumulative first preference income stock . 5 per cent second preference income stock 4 per cent first debenture stock 4J per cent second debenture stock Deferred warrants Notes, 6 per cent - £4,068,616 1,440,000 1, 661, 895 8,000,000 5,000,000 a 133,100 248,600 971 119* 85 98 100 (b) (6) 13 30 17 59 44 34 a June 30, 1916; amount since increased. & Not quoted. The company suffered severely following the outbreak of the European war and has not yet fully recovered. Net receipts for 1915-16 totaled £492,200 and fixed charges were £579,100, of which £133,100 were met by means of deferred certificates authorized early in 1916 under a funding scheme. Gross receipts for 1916-17 were approximately £28,000 larger than in 1915-16, and a moderate in- crease in net receipts resulted. In 1917-18 there was an increase of £139,700 in the gross receipts. The system is being operated as economically as possible without lowering the standard of main- tenance, and every effort is being made to put the property on a thoroughly firm basis. The railway is a good one, and is earnestly endeavoring to please its patrons by rendering good service. The 58 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. company was seriously affected by the collapse of the Argentine Railway (see p. 61), which had taken it over on what were believed to be favorable terms, and, owing, to the outbreak of the war shortly after the event just mentioned, it was unable fully to recover. The amount invested in the undertaking thus far exceeds £20,000,000, in- cluding the approximate sum of £3,200,000 expended on the Buenos Aires extension, with its terminals and substantial passenger sta- tion at Buenos Aires. This extension, although much criticized, will probably in time prove the salvation of the property. ENTRE EIOS RAILWAY. This is a British-controlled railway, 831 miles in length, forming a portion of the through route from Buenos Aires to Asuncion. Its southern rail terminus is at Ibicuy on the Parana River, where it connects via car ferry with the Buenos Aires Central Railway, over whose tracks the international trains are carried into Buenos Aires. The present Entre Rios Railway Co. acquired the property, then 379 miles in length, in the year 1892, this property consisting mostly of •the Central Entrerriano (Government) Railway. In 1895 the Primer Entrerriano Railway, Gualeguay Central to Puerto Riaz, was taken over ; in 1898 a line from Villaguay to Concordia was opened ; and in 1902 a large number of branches were completed, as well as the deep- water port of Ibicuy. The gauge of the line is 4 feet &J inches. In October, 1912, the Entre Rios Railway was leased to the newly formed Argentine Railway, which company has since passed into the hands of receivers. There is little likelihood that the terms of the lease will be carried out. The capitalization of the Entre Rios Railway is as follows : Securities. Amount outstanding. High price since 1911. Closing price January, 1918. Ordinary stock S per cent first preference stock (cumulative) 4 per cent second preference stock (noncumulative) . . 4 per cent debenture stock (redeemable) 5 per cent debentures (redeemable) 5 per cent consolidated debenture stock (redeemable) £1,783,140 2,000,000 734,049 1,505,000 700,000 1,303,000 105 81 99 107 97j 34 64 78 71 The ordinary stock received a 1£ per cent dividend in 1911, but none since. The first and second preference stocks received regular dividends of 5 per cent and 4 per cent, respectively, until 1914 ; since the outbreak of the European war no dividends have been paid on either class of preference stock. The following table shows the earnings of the railway over a period of years: Years. Average miles operated. Gross receipts. Surplus after charges. 1911-12 1912-13 1913-14 1914-15 1915-16 730 742 730 799 £472,101 611,145 609, 850 437,630 612,433 £89, 282 117,320 135,010 («) 67, 472 o Deficit of £61, 043. SOUTH AMERICA ARGENTINA. 59 In 1916-17 the gross receipts totaled £644,900, and the mileage operated was 831. For the year ended June 30, 1918, the gross receipts amounted to £857,900 — showing the very substantial increase of £213,000 over the figures for the preceding year. The following statistics indicate the development of road and equipment during the period from February, 1892, to June 30, 1915 s Items. Miles ofline open Locomotives Passenger cars Freight cars Ferryboats (car ferries) . The Entre Rios Railway is largely interested in the Argentine North Eastern Railway. ARGENTINE NORTH EASTERN RAILWAY. This company's lines extend throughout the Provinces of Entre Rios and Corrientes and into the Territory of Misiones. A large section of the railway forms an integral part of the route from Buenos Aires to Asuncion, Paraguay. A rapidly developing section of Argentina is served. The existing mileage is 752, the gauge being 4 feet 8* inches, and a large additional mileage is projected. The railway had the misfortune to complete and open for traffic large sections of new mileage just before the outbreak of the war in Europe. This had led to the issuance of substantial amounts of secured notes and loans. Gross and net revenues for the fiscal year ended June 30, 1915, were £108,000 and £60,000 less than for 1912-13. International traffic receipts, owing to existing conditions in Para- guay, did not come up to expectations, and this brought about a reduction in through passenger and freight train service and a nat- ural decrease in revenue. In order to meet interest requirements on certain debenture issues and the temporary loan, a funding scheme was carried out whereby funding scrip certificates were issued in lieu of cash for interest payments. The capitalization of the system as of June 30, 1916, was as follows : Stock. Ordinary snares (par £20) 5 per cent "A" debentures and "A" debenture stock b per cent " B " debentures and "B" debenture stock "C" debentures and debenture stock Amount. £2,768,500 1.200,000 992,229 1,023,750 5,984,479 High . price since Jan- uary, 1911. 60 112 105 92 Price January. 1918. 23 79 70 42 £0 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The earnings of the Argentine North Eastern Kailway over a se- ries of years have been as follows : Years. Average miles operated. Gross re- ceipts. Years. Average miles operated. Gross re- ceipts. 1910-11 614 665 665 666 £293,023 319, 312 367,025 348,489 1914-15 708 752 752 752 £259, 627 328,716 389, 100 457,600 1911-12 1915-16 1912-13 1916-17 1913-14 1917-18 It will be noted that gross receipts for 1915-16, as compared with 1914-15, showed an increase of approximately £69,000. Net receipts showed an increase of £60,000, and, after paying interest in full on the "A" debentures and stock and putting aside £20,000 for renewals, the company was able to meet the interest on the " B " debentures and stock for the second half of the year, interest for the first six months being paid in the funding scrip certificates. In 1916-17 and 1917-18 gross earnings showed further increases, and it is likely that the final returns will show substantial net increases, reflecting the better prospects of the property. Cattle traffic is now breaking all records, and a very large number of oranges are being handled. The amount of passenger traffic is fair, with prospects of increase owing to the fact that train service to Paraguay has recently been increased from one to two trains per week in each direction. The number of pas- sengers carried during 1915-16 was 169,291, as compared with 263,171 during 1912-13. Dining cars and sleeping cars are carried on .through trains. . The amount of equipment in service June 30, 1916, was as follows : Locomotives, 68 ; passenger-train cars, 96 ; freight-train cars, 1,270 ; ferryboats, 2. Sleeping cars and dining cars number 10 and 7, re- spectively. The ferries engaged in traffic with Paraguay made 1,158 trips dur- ing 1915-16, as compared with 628 trips during 1914-15. There were 29,862 tons of freight received from and 893 tons shipped to Para- guay during 1915-16, as compared with 13,564 tons and 787 tons the year previous. A total of 26,848 head of live stock were carried. Passengers interchanged totaled 2,660. CENTRAL RAILWAY OF THE CHUBUT CO. There is one other British-controlled and directly operated railway property in Argentina, namely, that of the Central Bailway of the Chubut Co., incorporated in 1886 to construct a railway extending from Port Madryn, one of the chief Patagonian ports, to Trelaw and Gaiman. The line is about 51 miles in length and serves an important section largely settled by Welsh colonists. At Port Madryn a sub- stantial iron pier is owned. Extensions of this line have been con- templated for some time to carry the system across the Bepublic to the foothills of the Andes. The company during past years has paid a number of substantial dividends on its stock, which is outstanding to the amount of £200,000. The £1 shares recently sold at 7s. a share, a price far below the high record. The 6 per cent debentures of the company are outstanding to the amount of £125,000. The gross re- ceipts of the property have been as follows: 1911-12, £35,184; 1912-13 SOUTH AMEEIdA ARGENTINA. 61 £40,052 ; 1913-14, £37,950 ; 1914-15, £28,526. The figures for 1915-16 and 1916-17 are not available. ARGENTINE RAILWAY. This company was incorporated in July, 1912, with a very broad charter. Interests were acquired or leases effected of several prop- erties, including the Cordoba Central Eailway, the Argentine North Eastern Eailway, the Entre Bios Eailway, the French Eailway of the Province of Santa Fe, the Eosario & Puerto Belgrano Eailway, and others. Owing to the crisis brought about by the war receivers were appointed for the company. The two-year notes of the com- pany were quoted January, 1918, at about 56. Just what methods will be followed in the reorganization of the property (if it is to be reorganized) is at present uncertain. A number of the properties have been returned to* their- original owners. In •addition to the railways mentioned, various land, cattle, and development properties were acquired by the Argentine Eailway. and were operated. The Argentine Eailway is officially incorporated! in Maine, and its pre- ferred stock was listed on the Baltimore Stock Exchange. Very little American capital is invested in the enterprise. FRENCH EAILWAY OF THE PEOVINCE OF SANTA FE. France, like Great Britain, has been attracted to Argentina as a country offering opportunities for the establishment and construction of railways. The principal so-called French lines in the Eepublic are the French Eailway of the Province of Santa Fe (Cia. Francesa de Ferrocarriles de la Provincia de Santa Fe), the Province of Buenos Aires Eailway, and the Eosario & Puerto Belgrano Eailway. Of these various lines the most important and financially successful is the Province of Santa Fe line. The original concession for the railway was granted by the Gov- ernment in 1882 to John Meiggs & Sons, of London, the concession calling for the construction of 815 kilometers (506 miles) of line. This concession was acquired in 1888 by a French company known as the Compagnie Fives-Lille, which later in the year transferred it to its present owners. Year by year this company expanded the system, reaching into new territory capable of development and bringing a large immigrant population to the district. On December 31, 1909, the length of the lines amounted to 1,709 kilometers (1,062 miles). Between that period and. June 30, 1915, 192 kilometers (119 miles) more were built, while concessions were held calling for the construction of an additional 274 kilometers (170 miles). The earn- ings of the system over a period of years have been as follows : Years. Approximate capital in- vested. Gross re- ceipts. Divi- dends. 1908-9. 1909-10 1910-11 1911-12 1912-13 1913-14. 1914-15. 1916-16. tmln. 85,087,573 88,735,951 93,338,936 101, 515, 013 109, 897, 853 116,519,124 117,510,073 119,501,786 I m/n. 12, 530, 266 12,353,505 13,445,093 13,153,215 13,791,335 12,904,841 9,879,194 11,388,736 Per cent. None. None. 42 8 7J 2 62 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The shares are listed on the Bourse in Paris, and the bonds, which bear interest at 3 and 4£ per cent per annum, are listed in Paris and London. The amount of bonds listed in London is £607,400. In January, 1918,, they were quoted at 55, as compared with 63 at the time of the closing of the London Stock Exchange at the outbreak of the war. Owing to various causes this company, since the year 1912-13, has found it impossible to meet the normal minimum interest upon the capital invested in its system. In 1914 the dividend paid upon the shares fell to 10 francs per share, equivalent to 2 per cent interest. In 1915 no interest whatever was paid to shareholders, nor did they receive any in 1916. During the 28 years of the company's existence, in two only has it been enabled to pay a dividend of more than 5 per cent. During 13 years it was possible to pay dividends varying between 0.84 and 4.76 per cent, while 13 financial years closed with- out the shareholders receiving any dividend at all in compensation for the capital invested. In 1914 the financial situation of the company had become par- ticularly critical. Without the assistance of its bankers in Paris it would have been unable to meet its most pressing charges and would have been obliged to suspend payments. Since then not only has the company had to meet the fixed de- benture charges but also (1) the expenditure necessary for reestab- lishing that part of the lines which was destroyed by the inundations of 1914 and 1915 and (2) maintenance expenses, demanded by official control or judged to be indispensable. The amounts thus invested have been as follows : Financial years. Mainten- ance ex- penses. Exnenses causad by floods. 1913-14 .' train 6,375,775 948,992 1,991,713 1,002,000 train 1914-15 709,408 278,819 190,509 1915-16 1916-17 Total 10,318,480 1,655,060 11,973,540 An issue of bonds at short date was made in 1916. By this means the company raised from 5,000,000 to 6,000,000 francs amortizable in 10 years. The following tables show statistics of working results, proceeds, and cost of fuel : SOUTH AMERICA ARGENTINA. WORKING RESULTS. 63 Years. Working expenses. Excluding contribu- tions to renewal lund. Including contribu- tions to renewal fund. Including contribu- tions to renewal lund to extent al- lowed by Law 531S. Operating ratios." Net profits on capital invested.** 1909-10. 1910-11. 1911-12. 1912-13. 1913-14. 1914-15. 1915-16. tm/n- 6,847,677 6,955,846 7,550,908 7,795,433 7,574,789 7,426,777 7,574,492 tm/n 7,677,543 7,921,532 8,413,959 8,458,108 7, 795, 768 7,451,317 7,876,090 tm/n • 7, 677, 543 7,921,532 8,413,959 8,621,277 8,486,227 8,267,793 8,520,695 Per cent. 55.43 51,73 57.40 56.52 58.69 75.17 66.51 Per cent. 62.15 58.92 63.97 61.31 60.41 75.42 69. 16 Per cent.' 62.15 58.92 63.97 62.51 74.81 Per cent. 6.20 6.95 5.51 5.45 4.57 2.08 3.19 Per cent. 5.26 5.91 4.66 4.85 4.38 2.06 2.93 Per cent. 5.26 5.91 4.66 4.70 3.79 1.37 2.39 « The three columns of percentages under these headings correspond, respectively, to the three columns under " Working expenses." AVERAGE RECEIPTS, GENERAL TRAFFIC. Years. Kilometric tons. Receipts per kilo- metric ton. Net proceeds per kilo- metric ton. 19U-12 368, 000; 000 404,000,000 390,000,000 317', C00, 000 391,000,000 tm/n 0.035 .034 .033 .031 .029 tm/n 1912-13 .013 1913-14 1914-15 1915-16 .009 COST PER TON OF FUEL FOR RAILWAY. Years. Wood. Coal. Years. Wood. Coal. 1912-13 tm/n 5 50 6.00 8.00 tmjn 23.03 22.86 23.34 1915-16 tm/n 9 50 10.50 11.50 tm/n 31 48 1913-14 1916-17 .. 1914-15 July, 1917 46 50 A recent statement indicated that the company had in service 160 locomotives, 284 passenger-train cars, and 5,643 freight-train cars. Nineteen sleeping cars and 9 dining cars were included in the passenger equipment. The railway handles a large tonnage of cereals, sugar, live stock, timber, etc. The gauge of the system is 1 meter. Among the extensions projected is a line to Asuncion, Paraguay. PROVINCE OF BUENOS AIRES RAILWAY. This company operates a railway approximately 1,287 kilometers (800 miles) in length, extending through various sections of the Province of Buenos Aires. Among the lines operated is one from Buenos Aires to Bosario, 377 kilometers (234 miles) a somewhat longer route than the Central Argentine Bailway's two lines and the Cordoba Central Railway. This section is also connected via a 64 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. branch with the port of La Plata. The company's concession allows for the construction of an extension to Bahia Blanca. For the year ended June 30, 1918, the system reported gross receipts amounting to $16,587,000 m/n, as compared with $13,555,000 m/n in 1916-17. The capital investment in the property exceeds $40,000,000 United States currency, on which sum only a small return has been earned thus far. The original concession for the construction of these lines was granted September 26, 1904, and the first section was opened to traffic early in 1908. A total of 1,088,160 passengers and 878,370 tons of freight were handled in 1914 (a normal year). The shares and debentures of this company are listed on the Paris Bourse. The company has port facilities at Rosario, La Plata, and Riachuelo. An extension runs from Buenos Aires in a southwesterly direction to Salliquelo, near the western boundary of the Province. This line parallels the Buenos Aires Midland Eailway. Another extension runs from Pa- tricos on the Salliquelo line to Villagas, near the northeastern corner of the Province. The La Plata branch reaches the important coal docks and wharves in the city. The equipment in service amounts to approximately 70 locomotives and 1,800 cars of various descriptions. ROSARIO & PUERTO BELGRANO RAILWAY. This company was incorporated in Paris in 1906 to build a broad- gauge (5-foot 6-inch) railway to extend from Rosario in a southerly direction to Puerto Belgrano,. a short distance eastward from Bahia Blanca. It was expected that the line would serve as a route for the interchange of considerable traffic between the various broad-gauge lines extending from Buenos Aires and points in the interior. The line is 493 miles in length, and its gross earnings for 1917-18 amounted to $2,567,200 m/n, as compared with $2,314,700 m/n in 1916-17. Following the incorporation of the Argentine Railway in 1912, this company was to have formed a part of that system, an option on the stock having been obtained. The capitalization con- sists of 50,000,000 francs stock and 137,500,000 francs 5 per cent de- bentures of a par value of 250 francs. The line was opened for traffic in 1911. This is the only broad-gauge line owned by a French company. BUENOS AIRES CENTRAL RAILWAY. This is the most important of the locally controlled railway sys- tems. A total of 252 miles of line is operated, including the line from Chacarita Station, Buenos Aires, to Zarate, from which point a car ferry connects with the Entre Rios Railway, which m turn routes traffic to the Argentine North Eastern Railway, these three companies forming the Argentine section of the through route from Buenos Aires to Asuncion, Paraguay. Another extension runs to Salta, Rojas, etc. The capitalization consists of $20,165,000 m/n shares of a par value of $500 m/n, most of which are held in Argentina, as well as £700,000 4^ per cent debentures and £600,000 5 per cent debentures, held largely in Great Britain. Dividends of 2 per cent and 3£ per cent were paid jn 1914-15 and 1915-16 on the stock. The debentures are quoted on the London Stock Exchange, as follows : Four and one- half per cent first debentures — High since 1911, 100; price January, SOUTH AMEEICA ARGENTINA.. 65 1918, 72. Five per cent second-mortgage debentures — High since 1911, 96; price January, 1918, 77. During the years 1913-14 to 1917-18 gross earnings have been reported as follows : Years. Mileage operated. Gross receipts. Years. Mileage operated. Gross receipts. 1913-14 175 230 252 £289,114 244,844 290, 580 1916-17 252 252 £312,620 1914-15 1917-18 383, 3C5 1915-16 Net receipts during the year 1915-16 amounted to £149,6-10, the operating ratio having been 48.5 per cent ; £881 was carried forward from 1914-15, and other income from various sources brought the total receipts to £156,214. Interest requirements were £61,500 and net profits totaled £94,714 ($1,084,908 m/n), equal to more than 5 per cent on the company's stock. The traffic consisted of 218,631 pas- sengers (as compared with 339,846 in 1914-15), 358,519 head of live stock (mostly cattle and sheep),, and 462,524 tons of freight (largely agricultural products). ECONOMIC RESULTS OF FOREIGN RAILWAY INVESTMENTS. A description has been given of practically all the privately oper- ated railway systems in Argentina. As may readily be seen, British investors are the important holders of the railway shares. Although at the present time these British-held lines are not enjoying their usual prosperity, it is clearly apparent that, covering a period of a dozen years, the returns oh sums invested have been very substantial. The results have not been confined to the dividend and interest re- turns. British rolling stock is employed on the railways of the Republic, the locomotives are propelled by British coal, and the trains run over British rails, with British rail joints, spikes, etc. Hundreds of British subjects have obtained remunerative positions with these companies, and the British nation has otherwise reaped substantial advantages from these enterprises. Probably there is no better illustration of the axiom " Trade follows the invested dollar " than the British-owned railways of the Argentine Republic. TOTAL PAYMENTS OF DIVIDENDS AND INTEREST ON SECURITIES. The following statement shows the total payments of dividends and interest for the fiscal year 1915-16 on shares and debentures of foreign railways operating in Argentina : Central Argentine Railway £2, 356, 018 Buenos Aires Central Railway (interest on debentures; stock held in Argentina) , 67, 500 Buenos Aires Midland Railway a 107, 360 Buenos Aires Western Railway 1. 455, 307 Buenos Aires Great Southern Railway 2,659,651 Province of Buenos Aires Railway (°) Buenos Aires & Pacific Railway 977, 795 Argentine Great Western Railway 369, 125 « Approximately correct. 6 For several years dividend and interest payments have been only nominal, 63018°— 18 5 66 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Argentine Great Western Railway £31, 631 Bahia Blanca & North Western Railway 440, 750 Villa Maria & Ruflno Railway 42, 690 Entre Rios Railway 160, 350 Cordoba Central Railway 441, 527 Argentine North Eastern Railway 87, 047 Central Railway of the Chubut (Patagonia) ° 15, 000 Province of Santa Fe Railway (6) Rosario & Puerto Belgrano Railway (6) Total 9. 211, 751 Additional statistical data concerning the privately owned rail- ways of Argentina will be found in the Appendix (p. 483). GOVERNMENT RAILWAYS. The subject of State-owned railways in Argentina does not directly interest the investor other than the holder of governmental loans; therefore, only a brief account of these lines will be given. They were constructed primarily to open for settlement tracts of outlying country, and have thus made possible the development of large areas of extremely fertile territory. The scheme of railway development mapped out by the Government is a thoroughly comprehensive one, and when fully carried out will bring western and southern Pata- gonia and similar remote sections of the Republic into rail com- munication with the capital and other important centers. The prin- cipal Government lines in operation or under construction are the Central Northern Eailway, the North of Argentina Railway, the Formosa & Embarcacion Railway, the Patagonian Railways, and the Diamante-Curuzu Railway. For years prior to 1915 deficits often resulted from the operation of the Government rail lines. In 1915 there was a substantial in- crease in gross receipts, as compared with 1914, and a very notice- able decrease in operating expenses. The receipts and expenses of the Central Northern Railway and the North of Argentina Railway for the two years mentioned were as follows : Items. 1914 1915 tm/n. 13,164,079 17,227,194 tm/n. 14,844,658 14,774,407 -4,063,115 +70,261 The Central Northern Railway (meter gauge) extends from Santa Fe, via Tucuman, Jujuy, and Negra Muerta to La Quiaca on the Bolivian frontier. Following the completion of a comparatively small mileage in Bolivia, this railway will form a very important section of a through route between Buenos Aires, Rosario, Santa Fe, etc., on the south, and Uyuni, Oruro ? Potosi, Cochabamba, and La Paz, Bolivia, on the north, with connections to Lake Titicaca, Arica, and Peruvian points. Branches extend to Resistancia, Santiago del Es- tero, Salta, Embarcacion, etc., the Embarcacion division forming a direct through route to afford connections with means of access to a Approximately correct. 6 Information not available. SOUTH AMEEICA ARGENTINA. 67 the Bolivian Oriente, including Yacuyba and Santa Cruz de la Sierra (Bolivia) . Connecting rail lines into this thinly settled territory will probably be constructed during the next few years. Iti the 4-year period 1911 to 1914, inclusive, approximately 950 kilometers (590 miles) of new line were completed and opened for traffic. Since the close of 1914, owing to war conditions, progress has been somewhat slower. The railway lines have been carried to considerable altitudes, the 12,000-foot mark being reached at Abra Tres Cruces. For the year ended June 30, 1917, the gross earnings of this State line amounted to $9,108,318 m/n, as compared with $8,167,788 m/n in 1915-16, $9,637,000 m/n in 1914, and $12,421,984 m/n in 1913. The North of Argentina Railway (meter gauge) extends from near Santa Fe westward across the pampas to San Juan, at the foothills of the Andes. There are several important branches, including a line to Cordoba. Approximately 1,512 kilometers (940 miles) are oper- ated. The operations of this line have usually resulted profitably. The capital investment in the two lines just described amounts to $120,000,000 o/s. The Formosa and Embarcacion line (meter gauge) will, when completed, be approximately 703 kilometers (437 miles) in length. This will exploit the vast and little-developed territories of Formosa and the Chaco. Approximately 300 kilometers (186 miles) of the line have been completed. Earnings, although not large, are steadily in- creasing. The Diamante to Curuzu-Cuatia line (meter gauge) will, when completed, run from Diamante, on the River Parana, in the Province of Entre Rios, westward to Crespo, 34 kilometers (21 miles) , where the Entre Rios line is joined and will be used to Hasenkamp. At Hasenkamp the Government continues operations on its own lines, which will extend northeasterly to Curuzu-Cuatia, on the Corrientes line of the Argentine North Eastern Railway. A rich and extensive territory is being opened up for development. Approximately 170 kilometers (106 miles) of the line have been completed. The Patagonian State Railways (5|-foot gauge) will open to the world that vast territory. Plans call for the construction of about 2,000 kilometers (1,243 miles) of railway, of which approximately 900 kilometers (560 miles) have been opened for full or provisional traffic. The lines are handicapped through lack of rolling stock, despite which fact earnings are showing a steady increase. The lines, when fully completed, will be as follows : (1) From Port Antonio, on the Gulf of San Matias, westward to Lake Nahuel Huapi, near the foothills of the Andes. The line may possibly be carried across the mountains to Chile to connect with the Chilean State Railways (also of 5-foot 6-inch gauge) at Osorno. The town of San Carlos de Bariloche, on Lake Nahuel Huapi, is to be the present western terminus. It is expected that this section of the Pata- gonian system will develop a fair traffic during the next few years. The line has been virtually completed, 448 kilometers (278 miles) being operated for passenger and freight service. Weekly passenger service is maintained. (2) The Lake Nahuel Huapi to Puerto Deseado line. This, when completed, will extend from the western terminus of the Port Antonio-Lake Nahuel Huapi line southward to join the Comodoro 68 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. Rivadavia-Lake Buenos Aires line (see next paragraph), from which point it will follow the Deseado River in a general southeasterly di- rection to its mouth at Puerto Deseado, in the territory of Santa Cruz (46° S.). About 283 kilometers (176 miles), from Puerto Deseado to Colonia Las Heras, have been completed. Semiweekly passenger- train service is maintained in each direction. (3) The Comodoro Rivadavia-Lake Buenos Aires Railway. This line terminates at the port of Comodoro Rivadavia, on the Gulf of St. George, from which point it will extend westward across Patago- nia to Lake Buenos Aires. The line has been completed as far west as Colonia Sarmiento, 197 kilometers (122 miles). Weekly passen- ger-train service is maintained. From January 1 to June 30, 1917, the combined earnings of the " State Development Railways," including the Patagonian lines and the Formosa to Embarcacion line, amounted to $832,221 m/n, as compared with $755,856 m/n in 1916. It is expected that, once conditions in Argentina have returned to normal, the Government will continue its policy of railway expansion and development. 1 PUBLIC UTILITIES. "The public-utility field has attracted considerable European capital to Argentina. According to the national industrial census of 1910, there were 56 power stations in the Republic, in which $48,737,877 m/n was invested. This number has since greatly increased, as will be indicated by the following statement, showing the number of cities and towns with power stations : Buenos Aires city, 1 ; Buenos Aires Province, 66 ; Entre Rios Province, 11 ; Santa Fe Province, 17 ; Cor- rientes Province, 8 ; Cordoba Province, 10 ; other Provinces and Ter- ritories, 19; total, 132. This total includes a number of plants in the course of construc- tion. Gas plants have been established in a few cities and towns; they are, however, not nearly so numerous as electric-lighting systems. No natural gas is obtainable in the country except in distant locali- ties, and electricity has proved the favorite method of lighting throughout the Republic. Tramways have been built in most of the larger cities, there being 1,091 kilometers (678 miles) of main track in operation at the beginning of 1915. ELECTRIC LIGHT AND POWER COMPANIES. The most important electrical company in the River Plate coun- tries is the German Transatlantic Electricity Co. (Compania Ale- mana Transatlantica de Electricidad). The company was formed in Germany in 1898 with a capitalization of 6,000,000 marks. Work in Buenos Aires was soon begun and the enterprise developed rapidly. The company has a certain amount of competition, especially from the Italo-Argentine Electricity Co. (Compania Italo-Argentina de Electricidad) in Buenos Aires. At the present time the capitaliza- tion of the German Transatlantic Electricity Co. consists of 110,- 000,000 marks bonds, 30,000,000 marks 5 per cent preferred stock, and 120,000,000 marks ordinary stock. Before the war dividends of 10 to 11 per cent per annum (10 per cent in 1914) were paid on the ordi- nary stock. The net profits of the Buenos Aires property for 1914 1 The total mileage of the Argentine State Railways in operation as of December 31 1917, was 3,815, and the net working deficit at the close of the year was $1,724,619 m/n! SOUTH AMEEICA AKGENTTNA. 69 amounted to 23,327,423 marks. Other holdings of the company are as follows: (a) Chilean Electric Tramway & Light Co., £650,000 preferred stock, £404,700 ordinary stock. This company, which operates in the city of Santiago, is capi- talized at £650,000 preference shares and £500,000 ordinary shares. Part, at least, of the remaining shares are held in Great Britain. About 50 per cent in back dividends was due in January, 1918, on this preference stock, which is entitled to dividends of 6 per cent per annum, cumulative, in priority to divi- dends being paid on the ordinary shares. In addition to the shares, approxi- mately £367,000 first mortgage debentures are outstanding. ( 6 ) The entire stock of the Electric Tramways of Valparaiso, Chile, is owned, amounting to $5,000,000 Chilean gold ordinary stock. (c) Transatlantic Electric Tramway Co., of Montevideo, Uruguay, $1,688,500 Uruguayan gold ordinary stock. This company operates one of the three tram- way lines in the city of Montevideo. (d) Argentine Electricity Co. (Cla. Argentina de Electricidad), Buenos Aires, $128,000 gold ordinary stock, $189,550 gold preferred stock. The total capital- ization of this company, incorporated in 1909, .is $388,600 o/s, of which $317,550 o/s is owned by the German Transatlantic Electricity Co., as indi- cated. The gross earnings for 1916 were $674,412 m/n and the expenses were $661,613 m/n. (e) Light & Power Co. (Empresa Luz y Fuerza), Mendoza, Argentina, $835,000 o/s ordinary stock, $138,100 o/s bonds. This company furnishes light, power, and electric tramway service to the city of Mendoza. The total capital- ization is $1,000,000 o/s ordinary stock and $138,100 o/s bonds. It is said that no dividends are paid. Approximately 19 kilometers (12 miles) of tramway lines are operated and about 6,000,000 passengers are carried annually. Another important electrical company operating in Buenos Aires is the recently formed Italo- Argentine Electricity Co. (Compafiia Italo- Argentina de Electricidad). During the year 1916 the com- pany completed its principal power station and installed its system in important central sections of the city. On September 15, 1916, it entered into a contract with the National Government whereby elec- tric energy is furnished to the port and customhouse of Buenos Aires. In spite of numerous delays arising from the difficulty of obtaining supplies on account of the European war, the company was able to complete its various concessions in time to receive a stipulated bonus of $200,000 m/n national bonds. The profits of the company for the year 1916, after deducting $271,677 m/n for writing off cost of in- stallation, amounted to $246,651 m/n, most of which was either cred- ited to reserve or carried forward. No dividends were paid, it being thought wise to conserve resources owing to the war. Power houses and other buildings owned by the company were carried on the bal- ance sheet at $12,329,580 m/h, cables and 'installations at $8,726,385 m/n, and municipal public lighting installations at $517,090 m/n. The authorized and subscribed capitalization of this company is $5,000,000. m/n. Gross profits for 1917 totaled $498,623 m/n and the amount brought forward $320,628 m/n. Patrons number 23,000. The Electric Co. (Compafiia Electricidad) of Eosario is a Belgian concern, registered in the year 1910. Its capitalization is 35,000,000 francs and its head office is in Brussels. Few details are available concerning its operations. Among other important companies in Argentina is the Anglo- Argentine Electricity Co. (Cia. Anglo- Argentina de Electricidad), incorporated in 1911. furnishing electric current to cities and towns throughout the Province of Buenos Aires, including certain suburbs of the capital. The authorized capitalization of ^ the company is $10,000,000 m/n, of Avhich $6,200,000 m/n is paid in. In 1911 and 1912 the company paid dividends of 8 per cent each, in 1913 9 per 70 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. cent, and none since. The net profits for 1915 were $420,655 m/n. A recent quotation for the $100 m/n shares was $35 m/n per share. In 1913 the shares sold as high as 110. An important company was incorporated in England in 1911 under the name of Cia. Electricidad de la Provincia de Buenos Aires, to take over a local company of the same name. The capitalization of the company consists of £1,000,000 ordinary stock (par £4), £300,000 7 per cent cumulative participating preference stock (par £1) , and £879,300 5 per cent first-mortgage gold bonds. These bonds, which closed at 80 per cent on July 27, 1914, on the London Stock Exchange, were quoted at 60 in 1916. There were no sales in 1917. Dividends on the preference shares were suspended following the May, 1914, payment. This company furnishes light and power to a number of towns in the Province, including Mar del Plata, Quil- mas, Junin, and San Luis. For the year ended July 31, 1917, gross revenues were £206,072 (£189,883 in 1915-16) and net profits £54,902 (£62,728 in 1915-16). No dividends were paid. The credit carried forward to 1917-18 was £1,258. Descriptions of several additional electric lighting and power concerns will be found in the Appendix (see p. 483). In addition to these, other companies that might be mentioned are: (a) The Electric Co. (Compafiia Electricidad) of Corrientes, supplying the city of Corrientes. The capitalization of this com- pany is $1,000,000 m/n, and the latest reported year's profits were $56,000 m/n. (&) The San Carlos Electric Co. (Empresa Electrica San Carlos), at Bolivar, with a capitalization of $250,000 m/n. (c) The Electric Light Co. (Alumbrado Electrico) at Rio Gallegos, Province of Santa Cruz. This is a new company, founded in 1915. The first year's operations resulted in a small profit. Probably the most successful among the several British-controlled electric light and power companies in the interior of Argentina has been the River Plate Electricity Co., whose plant is located in La Plata. The capitalization of the company consists of £200,000 5 per cent debenture * stock (par 100 per cent) — which sold at 105 per cent in pre-war days and in January, 1918, at 86 per cent — £125,000 6 per cent preference shares, and £150,000 ordinary shares. The ordinary shares (par 100 per cent) in 1912-13 sold at 262 per cent and at the closing of the London Stock Exchange July 29, 1914, were quoted at 240. In 1916 they reached the low figure of 120, and in January, 1918, sold at about 150. Dividends paid on this stock have usually been between 7 and 10 per cent, and a substantial balance has generally been earned and carried forward. Formerly the electric lighting plant in Tucuman was owned, but this was disposed of in 1914 to the Tucuman Light & Power Co. for the sum of £34,000 cash and £66,000 in debentures. The report of the River Plate Electricity Co. for the calendar year 1917 stated that the net revenues for the 12 months, after providing for the admin- istration charges, amounted to £43,515, to which was added £15,142 carried forward. A dividend of 7 per cent was paid on the ordinary stock. Reserves, etc., on December 31, 1917, totaled £279,667. The company owns, in addition to its property and the Tucuman Light & Power bonds, a block of 5 per cent bonds of the Argentine Elec- tricity Co. (controlled by the German Transatlantic Electricity Co.). No interest was received on these bonds in 1917, owing to the war. SOUTH AMERICA — ARGENTINA. 71 GAS COMPANIES. By far the most important of the none too numerous gas com- panies in Argentina is the Primitiva Gas Co., which furnishes the gas used publicly and privately in the city of Buenos Aires. This is a British-controlled company, its shares and debentures being quoted on the London Stock Exchange. In the days before the war the company was fairly profitable. Since that time, however, the in- creasing cost of fuel and supplies and the delay in collecting pay- ments for public lighting have brought about a large decrease in net earnings. The approximate capital and scale of prices for the securities are as follows: Securities. Amount. High price since 1911 Price January, 1918. Ordinary stock (par £5) Preference stock (par £5), 5 per cent cumulative 4 per cent first debentures (par £100) 4 per cent Buenos Aires debentures (par £100).. 4 per cent River Plate debentures (par £100) . . . 4 per cent debenture stock oJ 1911 (par £100) Total £1,450,000 2,500,000 450,000 225,000 315,000 600,000 91} 1 S 7S 53 62 59i 5,540,000 In the years 1911, 1912, and 1913 dividends of 8 per cent per an- num were paid on the ordinary stock, in 1914 7 per cent, and none since. The preference shares received 5 per cent through 1915; in 1916 the dividend was omittted. The annual report for 1914 stated that, with £43,905 brought forward, the profit was £323,331. Owing to the financial crisis the net revenue decreased about £84,000. The results for 1915 showed a net profit of £85,500, and funds were drawn from reserves to meet the dividend on the preference shares. In 1916 a deficit of £25,500 resulted, and a fairly large floating debt has accumulated. The coal cost for 1916 averaged £3 4s. ($15.57) per ton, as compared with £1 14s. ($8.27) before the war. Gross receipts in 1916 were £77,021 less than in 1915. In 1917 net profits were £83,499; charges, £84,243; loss, £744. The 4 per cent first debentures are being paid off by money received from the German Transatlantic Electricity Co. in payment of purchase price for elec- tric properties sold them in the year 1903. The amount paid to the Primitiva Gas Co. is £15,000 semiannually, to be applied to intarest and sinking fund on the bond issue above mentioned. The pay- ments expire in the year 1943. The gas mains of the Primitiva Gas Co. on December 31, 1917, totaled 1,138 miles in length, and the num- ber of services was 201,435, as compared with 203,755 in 1914. The South Barracas Gas & Coke Co. of Buenos Aires, and the Bahia Blanca Gas Co. are also British companies, their control and management being virtually the same. They are not large com- panies. The South Barracas Gas Co. is capitalized at £200,000 shares of a par value of £1. Before the war dividends averaged 4 to 5 per cent. Formerly the stock sold as high as £1 5s., but in Janu- ary, 1918, it had fallen in price to Is. 3d. per share. The securities of the Bahia Blanca Gas Co. have likewise fallen in price. The capitalization of the company consists of £150,000 ordinary "A" shares, par £5, and £70,000 ordinary " B " shares, par £1. The "A" 72 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. shares have a priority over the " B " shares to the extent of 6 per cent, and after the " B " shares receive 6 per cent both issues share alike in further disbursements. The company, which was registered in 1907, paid dividends of from 2 to Si per cent on the "A" shares to 1911; in 1912 the dividend was passed, and thus far it has not been resumed. The "A" shares, which are listed on the London Stock Exchange, formerly sold as high as par (5). When the European war broke out they were selling at 2-J; in 1916 they declined to 1, and recently they were quoted at f . Loans, held by bankers, were outstanding to the amount of £40,000. TRAMWAYS AND SUBWAYS. Tramway development in the Argentine Republic during the past few years has been somewhat checked owing to the business depres- sion of 1913 and the scarcity of investment capital on account of the European war. Nevertheless the larger cities of the nation are well provided with lines, which have occasioned high praise on the part of visitors to the country. The following table indicates the extent of the tramway mileage and the business handled in certain of the larger cities of the Republic : Cities. Miles of line. Passengers carried. 1913 1*14 493 81 29 27 16 21 12 423,661,657 26,089,671 6,781,546 7,950,580 2,021,444 1,200,000 5,800,000 387, 789, 519 27,010,000 6,113,676 6,580,000 1,860,000 1,310,000 5,237,158 La Plata Returns of the tramway companies in Buenos Aires for the months of March, 1916 and 1917, show the following results, indicating busi- ness handled at the present time : Items. 1916 Length of line miles Mi 'es run Passengers carried ^Receipts $m/n. 497 5,404,012 30,311,747 2,895,060 5,417,261 30,699,455 2,921,961 The receipts shown above were earned by the various tramway companies in operation as follows: Companies. 1916 1917 tm'n. 2,308,956 483,620 34,663 67,821 tmln 2,377,875 473,549 34,363 Port and City of Buenos Aires Tramways 2,895,060 2,921,961 a The actual mileage operated by this company was 385.8. 6 The Lacroze Tramwavs fLtd.) operated, as of June 30, 1917, 75 miles of tramway lines. Gross receipts for the year ended June 30. 1917, were $5,343,714 m,'n, as compare J with 85,653,223 m/n in 1915-16. SOUTH AMERICA ARGENTINA. 73 The Anglo- Argentine subway line (see p. 75) operates 14 kilo- meters (8.7 miles),- and results for March, 1916 and 1917, were as follows : Items. 1916 Miles run Passengers carried .• Receipts $m/n 200,168 2,414,775 241,477 207,699 2,404,045 240,404 Financial returns and other data concerning the Anglo-Argentine Tramways Co. will be found in the Appendix (p. 483). Results for 1916, which was not a good year, indicate that after including the £94,120 brought forward from 1915 and after deducting (1) £96,000 carried to depreciation renewals reserve, (2) £257,366 expended for maintenance, and (3) £840,716 for interest, sinking funds, and divi- dend of 5-J per cent on the first preference, there remained £50,961 to be carried forward. The appropriation for depreciation renewals reserve in 1915 amounted to £120,000, and maintenance in that year amounted to £265,963. A comparison of the present and past prices of securities of the Anglo-Argentine Tramways Co. and the amount of securities out- standing are shown in the following table. All these securities, ex- cept the ordinary shares, are listed on the London Stock Exchange; the ordinary shares are listed in Buenos Aires : Securities. Amount outstand- ing. Par value. High price since 1911. Price, January, 1918. 5J per cent first preference snares 5$ per cent second preference shares (cumulative).. 4 per cent redeemable debentures 4} per cent redeemable debenture stock 5 per cent redeemable debenture stock OMinary stock £3,200,000 2,500,000 4,352,000 1,720,000 6,000,000 3,250,000 £5 5 100 100 100 5 5J 58 97J 104" 105J <") C) 70 67 a The ordinary shares of this company are not quoted, the entire issue being held by the Compagnie Generate de Tramways de Buenos Aires, a holding company formed to amalgamate the tramway systems of the city. The total capitalization, £21,022,000, does not include outstanding securities of leased lines. The securities of the Buenos Aires Lacroze Tramways Co., second in importance among the tramway systems of the city, are as follows : Securities Ordinary shares Sterling 5 per cent first mortgage debenture stock 5 per cent extension mortgage debentures 5per cent consolidated mortgage debentures Total ' SI iu/n. Amount outstand- ing. £2,187,500 598,000 386,000 1,000,000 4,171,500 Pai value. High price since 1911. Is. fid. £100 100 100 ^Noi quoted. m 103 100 Price January, 1918. <") 74 75 67 74 INVESTMENTS IN LATIN AMERICA AND BKITISH WEST INDIES. The Buenos Aires Lacroze Tramways Co. owns a substantial in- terest in the Buenos Aires Port & City Tramways Co. and the .Buenos Aires City & Suburban Tramways (Ltd.). The Buenos Aires Lacroze Tramways Co. was incorporated in 1905, and its shares are held in Argentina. The Buenos Aires Port & City Tramways Co. has outstanding the following securities : Securities. Amount outstand- ing. High price since 1911. Price July 27, 1914. Ordinary snares Preference shares, 5 per cent cumulative 6 per cent first debenture stock 6 per cent extension first mortgage stock Total £239,608 82,000 242,207 S32, 700 00 103 00 00 (a) 00 896,415 " Not quoted. Interest on the bond issues went into default in 1914-15. The Buenos Aires City & Suburban Tramways Co. is capitalized as follows: Securities. Amount outstand- ing. Par value. Ordinary shares Preference shares 5 per cent first debenture bonds Total £115,000 115,285 "500,000 £1 5 100 730,285 o Mostly pledged. The company holds a concession to build 45 miles of line in Buenos Aires and to Las Conchas. Only a part of the line has been com- pleted. The Buenos Aires Lacroze Tramways Co. and the Buenos Aires Port & City Tramways Co. hold a controlling interest in the securities. None of the securities are publicly quoted. The earliest street car line in Argentina was that constructed by the Buenos Aires Great Southern Railway in Buenos Aires. This line was built in the year 1858 and ran from Plaza Constitucion to Lima and Morena Streets, then a railway terminus. This line and another constructed a few months later were controlled by railway companies and served as feeders to carry passengers between the sta- tions and important sections of the city. The first line of importance was constructed in 1868 by Federico Lacroze. It was 1\ kilometer? (4.7 miles) in length, and at that time was known as the Tramway Central (now Buenos Aires Lacroze Tramways, Ltd.). In 1870, it is said that there were 30 kilometers (18.6 miles) of horse car line in the city, and this mileage was rapidly increased during the fol- lowing 20 years by the granting of several additional franchises and the construction of lines in various sections of the city. In 1887 there were 110 miles of track, the lines carrying in that year 23.000,000 passengers. In 1902 the Anglo-Argentine Tramways Co. began to operate its lines by electricity. This line, incorporated in 1S70, had assumed the leading place among the various tramway systems in the city. In SOUTH AMEEICA — AEGENTINA. 75 1899 its horse car lines carried 28,665,541 passengers, which held the record until 1903, when its electric lines carried 35,470,461 passengers. The 1904 total was 45,076,077, and the 1905 total nearly 78,000,000. Since 1905 the company has absorbed a large number of its former competitors. Its record year was 1913, when it carried 342,140,422 passengers. During the same year the Lacroze lines carried 60,603,913 passengers. This latter company's lines were electrified in 1905 by J. G. White & Co. The splendid system of subways of which Buenos Aires is so justly proud was begun in September, 1911. The first section of the line was opened in 1913. This line extends from the Plaza Mayo, in front of the Government buildings, for. 14 kilometers (8.7 miles), double tracked, passing the House of Congress and the Buenos Aires West- ern Railway station. Work on the section from the Retiro Station (Central Argentine Railway) to the Plaza Constitucion Station (Buenos Aires Great Southern Railway) has been suspended until after the close of the war. This line will connect the last-mentioned station with the stations of the Central Argentine Railway, the Buenos Aires & Pacific Railway, and the Cordoba Central Railway, as well as the banking and central business sections of the city. On the line now in operation stations are provided every three or four squares. An excellent and rapid service is maintained There are, in addition to the various tramway and subway com- panies already discussed, two small independent traction lines, namely, the Electric Tramways of the South (Tramways Electricos del Sud) and the Buenos Aires to Quilmes Railway. These are local companies, all or most of the shares being held in Argentina. The capitalization of the former as of June 30, 1916, was $4,000,000 m/n, and the profits for the year 1915 were $110,657 m/n. This company was founded in 1905. The Buenos Aires to Quilmes Railway (founded in 1904) is capitalized at $200,000 o/s. A small surplus is usually earned. Among the tramway companies operating in other cities of Argen- tina the following may be mentioned: (1) The Light & Power Co. (Empresa Luz y Fuerza), of Men- doza, controlled by the German Transatlantic Electricity Co. Before the war this company paid substantial dividends. (2) The Argentine Tramways & Power Co., which operates or is constructing about 20 miles of tramway lines in and adjacent to the city of Santa Fe, and also furnishes electric light and power for com- mercial purposes. This company is capitalized at the following fig- ures : £239,250 ordinary shares, £200,000 6 per cent cumulative prefer- ence shares, and £184,500 debenture stock. During the year ended September 30, 1917, profits from operation were £13,959 (£12,256 in 1916 and total profits £12,142. The surplus after £2,000 reserve for renewal and after interest, etc., was £423. No dividends were paid. Most of the other tramway lines operating in Argentina are con- sidered in the Appendix (see p. 483). In common with the gas and electric lighting companies, the tramway lines have suffered through the lack of immigration, brought about by the war, through the gen- eral depression, and particularly on account of the abnormal price 76 INVESTMENTS IN LATIN AMEHICA AND BRITISH WEST INDIES. of fuel. There are many excellent public-utility properties in Argentina whose shares are selling at prices far below normal. The possibilities in this field, until immigrants again find their way to the country, are limited to the possible consolidation of various prop- erties with the view of economy in operation. As has been clearly indicated, British and German capital has been most active in this field, although fair amounts of Belgian and Italian capital have been invested. The United States has not yet had any important part. TELEPHONE INVESTMENTS. The first company to undertake telephone development in Argen- tina was the Pan-Telefono Co., established in 1881. A competitor known as the Gower-Bell Telephone Co. was established the same year. In 1883 the Union Telephone Co. was formed and took over the earlier concerns. In 1886 the United River Plate Telephone Co. began operations, taking over the property of the Union Telephone Co. The " United " has continued uninterruptedly in the field since that date, although the Cooperativa Telefonica and other competitors have since been started. The United River Plate Telephone Co. has outstanding the following capital, all of which is listed on the Lon- don Stock Exchange and actively quoted: Securities. Amount outstand- ing. Par value. High price since 1911. Price January, 1918. £1,620,000 200,000 300,000 £5 5 100 8 5i 105* 6} 80 2,120,000 The ordinary stock has usually received 8 per cent per annum, which is the present dividend rate. The preference shares are en- titled to 5 per cent per annum, cumulative, and the debenture stock to 4£ per cent. The " United " company's lines in Buenos Aires are operated by a subsidiary, the Compania Union Telefonica. The Cooperativa Telefonica, which began business in 1887, has outstanding approximately $1,850,000 m/n shares, par $20 m/n. The company earned a profit of $249,935 in 1915, paying dividends of 6 per cent on the preference shares and 8 per cent on the ordinary shares. These are the usual dividend rates of the company. Buenos Aires stands thirteenth among the larger cities of the world in the number of telephones installed per hundred inhabitants, its total per hundred inhabitants about equaling the totals of London and Paris. That the telephone business in the interior of the country is good is indicated by the fact that the Compania General de Telefonos. operating the telephone lines in the city of Mendoza, usually pays dividends of from 10 to 15.4 per cent on its $500,000 m/n stock. WATER SUPPLY AND SANITARY WORKS. Prior to 1891 the water and drainage works of the city of Buenos Aires were operated by a private enterprise, the Empresa Arrenda- taria, a British company. On October 5, 1891, the British company was dissolved and the control and administration passed to the Ar- SOUTH AMEEICA AEGENTINA. 77 gentine nation, the operations being carried on by an appointed board known as the Obras Sanitarias de la Nacion (Sanitary Works of the Nation). Owing to the fact that a large portion of the city had been dependent upon wells for water supply and was without satisfactory drainage and sanitary facilities, it was decided greatly to extend the water and sanitary works of the city. Accordingly, in the year 1908 a comprehensive scheme was adopted which it was calculated would amply provide for the existing population and for future growth. In accordance with this plan, the city was divided into two districts — one comprising 7,413 acres, in which the water and drainage systems established prior to 1891 were to be supple- mented, and a new district of 39,575 acres, for which a new sanitary system was to be laid out. The water is to be pumped from the River Plate at a point above the city to decanting reservoirs, filter beds, gravity and reserve tanks, from which will extend a network of water mains running to all parts of the city. A pumping capacity of 8,828,500 cubic feet daily, four water reservoirs 314 by 344 feet, and seven filter beds with an area of 519,901 square feet are being installed. The drainage system called for the construction of a main sewer with branches serving the entire city. The outlet for this sewer is in the River Plate, about 16 miles below the city. The system in 1908, prior to the commencement of the construc- tion work on the extension, represented an outlay of $48,802,597 United States currencv. The estimated cost of the extension was $71,821,233, of which practically $60,000,000 had been expended to December 31, 1916. The work may therefore be said to be nearing completion, notwithstanding the delays in procuring the necessary materials and supplies. The revenue received by the National Sanitary Works from 1903 to 1916, inclusive, is estimated at more than $60,000,000. Totals have increased from $2,378,912 in 1916 to more than $7,000,000 per annum. Under the supervision of the National Sanitary Works, work simi- lar to that being carried on in Buenos Aires is under way in Mendoza, Catamarca, Mar del Plata, Corrientes, and Cordoba. These sanitary works will be maintained through the raising of special taxes. It is interesting to record the amount expended and the revenue for service (supplying water and drainage facilities) in the various districts under the supervision of the board : Districts. Total to Dec. 31, 1916. Revenues in 1914. Lottery grant. Adminis- tration and upkeep, 1914. Federal Capital Catamarca Cordoba Corrientes Jujuy La Rioia y Chilecito Mar del Plata Mendoza Parana Salta Tucuman .... Santa Fe Santiago del Estero . San Juan San Luis 115,000,000 810, 053 5,417,000 2,918,905 1,018,378 705, 332 3,987,710 3,803,546 1,839,274 3,382,435 6,336,582 3,542,232 2, 134, 288 1,183,369 723,933 $7itfn 12,725,718 17, 127 492,868 88,297 24,240 17, 219 180, 967 187, 114 160,835 142,423 397, 484 263,955 50,949 67,823 19,513 $mln 47,946 47,946 47,946 47,946 47,946 47,946 47,946 47,946 47,946 47,946 47,946 47, 946 47,946 47, 946 Im/n 4.422, 850 26,552 287, 197 150,698 16,720 34,738 180,967 187, 114 218, 634 37, 256 444, 698 214,977 122, 513 55,004 28,535 78 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. One of the most important of the privately owned waterworks is operated by the Province of Buenos Aires Waterworks Co., a British company that furnishes the necessary water supply for seven cities and towns located in the Province of Buenos Aires.' The concessions covering three of the towns extend for 50 years; the remaining four cities and towns may purchase the waterworks at the end of 20 years ( between 1930 and 1933) at a fair valuation, plus 20 per cent indem- nity. The selling price will decrease each year after 20 years, until at the end of 40 years from the date of the original concession the works become the property of the various municipalities. The cap- italization of this company is as follows: Securities. Dividend. Amount out- standing. Par value. High price since 1911. Price January, 1918. 7 per cent nonciimula- tive. £450,000 4,400 150,000 £5 Is. £5 ■a (•) 4} 5 per cent cumulative . a Not quoted. After dividends of 5 per cent per annum (cumulative) have been paid on the preference shares, the ordinary "A" shares are entitled to 7 per cent, the balance to be divided between the "A" and " B " shares. Dividends of 5 per cent each are being maintained on the preference and "A " shares. Eates on the latter class of shares have varied from 4 to 6 per cent per annum since the beginning of opera- tions. 1 A British company, the Consolidated Waterworks Co., furnishes the water supply for Eosario, which, as has been stated, is the second city in size and importance in the Eepublic. The city of Eosario may expropriate the undertaking at a price that would net, at 6 per cent per annum, an income equal to the net income for the year previous to such expropriation, plus an indemnity of 20 per cent. The company was registered in 1896, taking over the then existing properties and extending them. The company has been successful and has maintained a dividend rate of 8 per cent over a considerable period of years. Gross receipts of the company for 1916 totaled £129,472 and net receipts £69,656. Surplus after charges amounted to £32,306. Net receipts for 1917 amounted to £69,741. The sewerage and drainage concessions for the city of Eosario are also held by British interests, the Eosario Drainage Co. (see Ap- pendix, p. 495). The franchise expires in 1974. The company op- erates about 6,500 drainage connections. The company paid 3 per cent on its £369,200 ordinary stock during 1916, as compared with the maximum rate of 4 per cent. The stock was quoted in January, 1918, at 12s. per £1 share. Full dividends have been maintained on the 6 per cent cumulative preference shares (£120,000 outstanding). The company's two issues of debenture stock — £148,500 and £226,000 outstanding (first and second debenture stock) — are quoted at ap- proximately 71 and 70, respectively, as compared with record high prices since 1911 of 87 and 84. 1 Editor's Note — Information received as this monograph was going to press shows that in 1917 profits totaled £16,663 and £5,495 was Drought forward from 1916. The dividend on preference shares was 2J per cent. The balance carried forward was £is,378. SOUTH AMERICA ARGENTINA. 79 The Bahia Blanca "Water Co. (also British) has a concession to furnish water, to Bahia Blanca and the near-by harbors of Ingeniero White and Punta Alta. This concession is for 99 years from October 16, 1918. The authorized capital stock of the company is £500,000 preference stock and £62,500 ordinary stock. The dividend rate is usually 4 per cent per annum. MINING ENTERPRISES. Argentina has done much to develop its considerable mineral resources. No taxes are levied on mines and minerals, and the dis- coverer has prior right over all other applicants for mining proper- ties. It is stipulated, however, that all mines must be worked by at least four men and for a period of 230 days in the year. Thus far tungsten, gold, copper, wolfram, borax, and petroleum have been the most important minerals developed. Very few min- ing companies have yet reached the stage wherein large profits are realized. Exports of minerals during the past 10 years have scarcely exceeded $3,000,000 o/s, despite the known mineral wealth of the Republic. Gold is mined in small' quantities throughout various sections of the Eepublic. Along the southern Patagonian coast, following heavy sea storms, a fair quantity of the yellow metal is gathered from among the sands. Alluvial digging has also been carried on in a moderate way since early colonial days. The total gold production from 1909 to 1913, inclusive, was estimated at $865,000 o/s. The Capillita gold mines, in the district of Catamarca, are among the most important. The Neuquen Proprietary gold mines in northern Patagonia are also of fair size. Their capitalization amounts to approximately $1,500,000 m/n, and the profits for 1915 were $121,233 m/n. Copper mining has been developed to a fair extent, although most of the undertakings have been hampered by lack of working capital. A number of copper deposits exist in the Andean Ridges, many of them very difficult' of access. There is every reason to believe that the industry has excellent future prospects. From time to time small amounts of the mineral have been exported to Europe. Silver was formerly mined. The ore was generally of only mod- erate grade, and following the decline in the price of the metal the mines were abandoned. The recent rise in silver may lead to the reopening of the mines, which are located in La Rioja. Sulphur has been found in Mendoza, and there are coal deposits in that Province, as well as in Neuquen and the Patagonian Territo- ries. In the so-called Chos-Malal district of Patagonia several depos- its have been located, including two or three of promise. One of the coal fields extends from the Neuquen River southward for 8 or 10 leagues, keeping near the Chacayo River. One seam of coal has been discovered, several feet in thickness, that extends for several miles. The acute shortage of coal in Argentina has led to efforts to develop some of the Patagonian coal lands, and immediate steps are being taken to open up the Epuyen-district mines. These are located in the Territory of Chubut, about 300 kilometers (186 miles) from the Nahuel-Niyeu station on the Government's San Antonio Railway, and it is proposed to carry the coal on wagons to the railway. 80 INVESTMENTS IN LATIN AMERICA AND BEJTISH WEST INDIES. Fifty men were recently sent to the mines to prepare for active devel- opment work. There are waterfalls in the territory near the mines, and these will probably be utilized for water power. The quality 01 coal in Argentina is certainly not of the highest, nor will transporta- tion and production costs be low. Nevertheless, the shortage of the mineral will be partly relieved, and industrial companies, railways, and public-utility companies, as well as private consumers, will be benefited. Operations in a small way have been begun on a coal deposit in the Province of San Juan, about 400 tons of coal per month being produced. The railways are also experimenting to a certain extent with Mendoza coal, a small mine being worked near the sta- tion of La Hullera on the Buenos Aires & Pacific Railway. During 1916 development in the tungsten-mining industry con- tinued. This mineral is mined chiefly in the Province of San Luis,- but also in San Juan and La Rioja. Prior to 1916 the best year's production was in 1909, when about 900 tons were mined, this repre- senting about one-seventh of the world's production. The minimum production during the past 10 years in Argentina has been 325 tons. PETROLEUM DEVELOPMENT. As in most other South American countries, the problem of obtaining fuel became acute in Argentina with the progress of the war in Europe. That country had been accustomed to depend almost wholly on the United Kingdom for its coal, which was used for ships, railways, industries, and general fuel purposes. In 1913, out of 4,046,000 tons of coal imported, 3,977,000 tons came from the United Kingdom. When the war broke out and shipping was temporarily paralyzed the country had to fall back on stocks on hand, and even though shipments were later resumed they were necessarily in much reduced quantities. Although the United States supplied a part of the demand, Argentina in the last two years or so has experienced almost a coal famine, especially among the railways and other con- sumers in the interior. This has directed increased attention to the supply of fuel oil in the country and the possibility that it can be made a leading source of fuel for Argentine industries so that they can be made independent of foreign production and free from the danger of suspension which has faced them for the last three and a half years. Petroleum production, although steadily increasing in the last ten years, is still far from reaching a point where it can thus satisfy national needs. In 1916 the highest yield up to that time was recorded, the output of the wells at the Comodoro Rivadavia field being about 820,000 barrels. This was 60 per cent greater than in 1915, when the output was 516,000 barrels. From 1907, when pro- duction began, to 1916 the output was as follows : 1907, 101 barrels ; 1908, 11,472 barrels; 1909. 18.431 barrels; 1910, 20,753 barrels; 1911. 13,119 barrels; 1912. 47,007 barrels; 1913. 130.618 barrels; 1914, 275,500 barrels; 1915, 516,120 barrels; 1916, 820,000 barrels. That this production, although steadily growing, has not served to satisfy national needs is shown by the large oil-import figures, amounting to 256,024 tons in 1915, 212.398 tons in 1916, and 222,610 tons in the first nine months of 1917. The Argentine oil runs about 6.8 barrels to the metric ton, but the imported oil, which is lighter, SOUTH AMERICA ARGENTINA. 81 would go higher than this, so that the yearly imports may still be considered as approximately twice the production. Even with the rapidly advancing production, however, there is no reason to expect material decreases in importation in the near future, as the oil from the present producing regions can take the place of only certain grades of imported oil. It is also questionable whether under present conditions Argentine oil can be laid down in Buenos Aires at a price lower than that from Mexico and the United States. Only one oil field in Argentina has as yet been exploited, but there are four regions in which oil deposits, more or less extensive, are known to occur. These are the Comodoro Rivadavia field, now being worked, located in the vicinity of the port of that name on the Atlantic coast about 850 miles south of Buenos Aires; the Salta- Jujuy field, in northweetern Argentina, in the provinces of those names; a district known as the Cacheuta field, a few miles south of Mendoza; and the Mendoza-Neuquen field, 600 to 800 miles south- west of Buenos Aires. Indications of oil in other regions are re- ported from time to time, and it is possible that extensive petro- liferous areas are yet to be discovered, but there has as yet been no exploration of fields other than those mentioned. Except in the first-named field, indeed, little is definitely known about the possi- bilities of these four regions. They are estimated to cover altogether an area of several thousand square miles, but the " proved " area is less than 2 square miles. DISCOVERY AND DEVELOPMENT OF SOUTHERN FIELD. The Comodoro Rivadavia field has been producing oil only since 1907. In December of that year the General Board of Mines, Geology, and Hydrology of the Argentine Government was con- ducting geological investigations near Comodoro Rivadavia, in the course of which boring operations were being carried on, when oil was struck at a depth of 535 meters. A Government decree was immediately issued forbidding the recording or " denunciation " of claims within a certain radius of Comodoro Rivadavia, and explora- tion of the new field was begun by the board mentioned. Develop- ment proceeded slowly, however, and by the end of 1910 only seven wells had been sunk, four of which were for various reasons not producing. In November, 1910, a law was passed creating a reserved area for governmental exploitation covering 5,000 hectares (hectare = 2.47 acres), and in December an Executive decree placed oil op- erations in the charge of a special commission, the " Administrative Committee of the Comodoro Rivadavia Petroleum Fields." This commission has directed the exploitation of the reserved area since that date. A comprehensive report of the commission, presented to the Min- ister of Agriculture in February, 1916, reviewed its achievements up to that time, showing that from the beginning of the working of the field 25 wells in all had been sunk, and 12 additional borings were in process at that time. The depth of the borings ranged from 526 to 565 meters, except in the case of one well, which had gone to 634 meters in search of new strata. Petroleum had been found in every well, and at the time the report was made the 21 wells in active production were giving about 14 tons per well per day. There 63018°— 18 6 82 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. were no gushers in this field. For storing this oil the commission had erected at Comodoro Rivadavia four steel tanks with a capacity of 6,000 cubic meters each, and had other storage space with a total capacitj 7 of about 26,000 cubic meters (a cubic meter of this oil is about 0.93 metric ton), while two steel tanks at Buenos Aires re- ceived the oil at that port. Two tank steamers, one owned outright and one chartered, were used to transport the oil, and two others were under construction in the United States. The commission made an appeal for more funds with which to carry on exploitation work, asserting that development of the field had been greatly retarded because of insufficient appropriations by the Government. It proposed a Government bond issue of 15,000,000 pesos paper, and if these funds were granted it estimated that the production could be made to reach 480,000 tons in 1918 and 840,000 tons in 1920, thus providing a good percentage of the national needs. In order, however, to replace entirely the coal that had been im- ported in normal times, it was calculated that an annual output of some 2,500,000 tons would be necessary. The desired 15,000.000 pesos was not authorized by Congress, but development along previous lines has proceeded since the above report was made, and the output has steadily increased. In July, 1917, there were 36 wells in operation and 19 more were being bored. The President of the Republic, in a message to Congress, estimated that production in 1918 would reach at least 200,000 tons. Two new storage tanks of a capacity of 6,000 cubic meters each and two others of 1,500 cubic meters were installed at Comodoro Rivadavia, and the two tank steamers mentioned above were delivered in the latter part of 1917. The weekly output, which in the first part of 1916 amounted to 1,600 to 2,000 cubic meters, by the latter part of 1917 had reached more than 4,000 cubic meters. A six weeks' strike of the workmen in the oil fields, beginning September 29, cut down the total of the year's output, but after this was settled production was resumed at the previous comparatively high rate. The policy of the Government with regard to increasing the output is one of conservation as well as exploitation, and while the desirability of intensifying production in order to provide national fuel and make the country independent of foreign sources of supply is recognized, the Government is guarding against the policy of working the fields to such an extent that a considerable exportation would result. GOVERNMENT AND PRIVATE OPERATION. The question as to what is the best method to follow in developing this admittedly promising field at Comodoro Rivadavia has caused much discussion and controversy. Government operation has been criticized as resulting in too slow a development, and plans have been brought forward which contemplate either a leasing of the field to private interests or a working of the field through a sort of partnership between the Government and private capital. The Gov- ernment, however, has not heretofore looked with favor on the relinquishment of control of oil operations, and there is apparently no prospect that any change in the system of management will be made. One reason why Government control is considered necessary is that the oil may be used extensively in the future for the navy, SOUTH AMERICA ARGENTINA. 83 and the oil reserve at Comodoro Rivadavia is looked on as a sort of fuel arsenal. A few private companies have been operating outside of the re- served area. Among these may be mentioned the Compafiia Argentina de Comodoro Rivadavia. The company has an authorized capitalization of $5,000,000 m/n, of which $3,000,000 m/n is out- standing. The company, in addition to its oil wells, tanks, and equip- ment, has constructed 7 kilometers (4.3 miles) of railway, which con- nects with the Government railway to the near-by port of Comodoro Rivadavia, as well as 3 kilometers (1.9 miles) of pipe lines. Natural gas and petroleum have both been found in good quantities, and the property, although still largely in its development stages, seems to be highly promising. Other companies in the field are the Compafiia Nafta (Naphtha) de Comodoro Rivadavia, capitalized at $275,000 m/n ; the Compafiia Petroleo de Comodoro Rivadavia, capitalized at $1,077,000 m/n, etc. QUALITY OF OIL. As to quality, the Comodoro Rivadavia oil is heavy, with an asphalt base and a specific gravity ranging from 0.922 to 0.940, according to the United States Geological Survey, and on distilla- tion yields 1.5 to 3.5 per cent of naphtha and gasoline, 15 to 19 per cent of illuminating oils, and 77 to 85 per cent of lubricants, fuel, and coke. This is heavier than the better grades of oil produced in the United States. The Argentine product has heretofore been used almost entirely as fuel, although the statement, has been made that it will distill readily. It will doubtless find its chief usefulness as a fuel, to be used for combustion purposes as a substitute for coal. It is so used now by a number of Argentine factories, a few locomo- tives (although the railways for the most part are burning the hard quebracho wood now instead of coal), and some other fuel consumers. The " f rigorificos " in many cases use fuel oil, but this seems to be mostly if not entirely Mexican oil, imported by the Anglo-Mexican Oil Co., one of the two large private concerns that handle oil in Argentina. The other is the West India Oil Co., but this company imports oil from the United States for refining. MARKED INCREASE OF PRICES— UNDEVELOPED FIELDS. Prices of Argentine oil have naturally risen to high levels, in sympathy with the increases in prices of coal and costs of produc- tion and transportation. It has been the policy of the Government to offer the Comodoro Rivadavia product at little more than cost price, and in 1916 it was being supplied to factories at the rate of $24 paper ($10.17 United States currency) per metric ton. The commission, however, found it necessary to raise the price on March 1, 1916, to $40 paper, delivered to customers in their own containers at Buenos Aires, and since then it has mounted rapidly, reaching at successive steps $50, $60, $70, $85, and finally in December, 1917, $95 ($40.28 United States currency) per metric ton. As production has been increasing materially, the income from sales at these high prices has enabled the commission to proceed further wifti its develop- ment plans. 84 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. The oil in the other three fields besides the Comodoro Rivadavia is of somewhat different quality, having a paraffin instead of an asphalt base. The specific gravity of one sample of the Mendoza product was about the same as that of the coast oil, while the tests of Salta-Jujuy oil indicate a greater percentage of lighter constitu- ents. It is asserted that samples from this district show a grade equal to that of Pennsylvania or Ohio, and one Government analysis gives 5 per cent of light oil, 30 per cent of kerosene, and 52 per cent of lubricating oil. It is very evident, however, that further explorations will have to be made in all these fields before the quality of the mineral, extent of deposits, and value to the industries of the country can be even approximately determined. Such explora- tion must await better transportation facilities, one big handicap to boring operations heretofore having been lack of water and supplies in the oil districts and difficulty of getting these necessities into these districts and the oil out. [The foregoing data, compiled for the most part in the Latin American Division of the Bureau of Foreign and Domestic Commerce, were taken from a number of different sources, to which readers are further referred. The files of the Review of the River Plate, published in Buenos Aires, contain numerous notes and reports on the petroleum industry, and developments are followed rather closely each week. A resume 1 of information regarding all Argentine fields by Frederick 6. Clapp appeared in the Bulletin of the American Insti- tute of Mining Engineers for October, 1917. The United States Geological Survey, in its annual reviews of the petroleum industry of the world, includes accounts of Argentine production, the latest separate report now available being that for 1915. Two good accounts of oil production in Argentina have appeared in Commerce Reports, being translations of articles in La Naeion, Buenos Aires. These are to be found in the issues for June 2. 1917, and May 27, 1915 (correction of figures of production in issue of October 1, 1915).] UTILIZATION OF FOREST RESOURCES. The forest areas of Argentina are proving sources of considerable national wealth. In the northern and northwestern Provinces de- velopment work is steadily being carried out and large returns are being realized by the various companies interested in the industry. The principal forest resources of the Eepublic are in the Provinces of Santa Fe, Santiago del Estero, Cordoba, and Tucuman, and in the Territory of the Chaco. In western and southern Patagonia rich timberlands also exist, covering relatively large areas. THE QUEBRACHO INDUSTRY. As is the case in the Republic of Paraguay (see p. 313), the que- bracho (break-ax) is by far the most valuable tree found. This tree, which exists in the more northerly Provinces and Territories only, grows in two varieties, red and white, takes 90 to 100 years to come to full maturity, and reaches a height of 80 feet and a diameter of about 2£ feet. The logs of the quebracho are annually exported in considerable quantities for the extraction of tannin, while an in- creasing quantity of the tannin itself is being extracted locally and likewise shipped abroad. An extensive local market has been found for the quebracho. For some years it has been extensively used by the railways for sleepers. At the present time, although little rail- way construction is going on in the Republic, large amounts of the wood are used in the locomotives as fuel, owing to the acute shortage SOUTH AMERICA ARGENTINA. 85 of coal, and a substantial amount is used for a similar purpose by manufacturing concerns. In former years Great Britain was the principal purchaser of the ?uebracho extract or tannin, but since the outbreak of the war the Jnited States has gradually come to take the largest quantity. In June, 1917, the United States purchased 3,821,220 kilos (8,424,380 pounds), Great Britain 2,623,130 kilos (5,782,966 pounds), France 2,569,000 kilos (5,663,630 pounds), Norway 1,100,000 kilos (2,425,062 pounds), Italy 1,026,353 kilos (2,262,698 pounds), and Spain 20,000 kilos (44,092 pounds). Exports of quebracho and quebracho extract during recent years have been as follows: Years. Quebracho extract. Quebracho logs. Tons. Value. Tons. Value. 1901 4,310 30,839 68, 431 74,910 79, 684 80, 153 100,213 to/s 431,000 2,162,950 4,980,027 4,836,860 4,974,687 5, 186, 946 15,873,372 198,920 230, 100 438,219 279,342 383,964 291,942 209,679 tofi 1,989,200 1906 3,425,101 1911 6, 897, 435 1912 3,568,557 1913 4, 988, 349 1914 3, 777, 124 1915 2,684,408 Probably the largest concern interested in the quebracho industry is the British-controlled Forestal Land, Timber & Railways Co. This company is capitalized at the following figures : Securities. Amount outstand- ing. Par value. High price since 1911. Price January, 1918. Ordinary stock r Preference stock (6 per cent) 5 per cent first mortgage refunding bonds 5 per cent mortgage debentures of 1914 . . . Total £1,545,849 1,545,850 1,158,700 1,172,100 £1 1 100 100 21 105 104J 2J 103 104 5, 422, 499 The company's balance sheet as of December 31, 1916, stated that general reserves amounted to £772,925 and special reserve to £450,000. The depreciation fund amounted to £773,212. A total of £800,000 has been set aside for war-profit tax and other contingencies. The amount carried forward to the credit of preference shares as of December 31, 1916, was £46,061, and to the credit of ordinary shares £138,162. 1 The preference shares are entitled to cumulative divi- dends of 6 per cent per annum and to 25 per cent of remaining profits. The ordinary shares are entitled to the balance. The average divi- dend paid during the 11 years to and including 1916 has been 11£ per cent on the preference shares and 16£ per cent on the ordinary shares. The rates for 1915 and 1916 on the two classes of stock were 12 per cent and 15 per cent on the preference and 18 per cent and 27 per cent on the ordinary shares. During the 11-year period previously mentioned the item of " good will, which stood at £405,000, was 1 In 1917 the profits after depreciation, charges, etc., totaled £822,395, which was appropriated as follows : Reserve for excess profits, etc., £200,000 ; special reserve account, £150,000; preference shares dividend (12 per cent), £187,661; balance, £284,733. The dividend on the ordinary shares was 18 per cent. 86 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. written off, and large capital expenditures were made. Net profits for the year 1916 amounted to £1,614,898, as compared with £900,947 in 1915. The excess-profit tax for the year amounted to £600,000. In addition to its forest areas, the Forestal Co. owns large cattle ranches, about 300 leagues of cleared land lying unused, and a con- siderable mileage of light railways. The total area of all properties, including about 650,000 acres leased, is about 5,500,000 acres. All the stock of the Puerto Ocampo Railway, the Compaiiia Argentina cle Lanchas, and the New York Quebracho Extract Co., of New York City, is owned, as well as about £129,200 of the £355,920 shares of the Development Co. of Santa Fe (see Appendix, p. 491). The company guarantees the interest on the bonds of the Quebrachales Fusionados, which are outstanding to the approximate amount of £100,000. The Sociedad Anonima Quebrachales Fusionados, while inter- ested primarily in Paraguay, has nevertheless large properties in the Chaco and elsewhere in Argentina. The company was incorporated under the laws of Argentina in 1906. The capital stock amounts to $1,750,000 m/n, having been reduced from $7,000,000 m/n in 1913, in which year the par value of the shares was reduced from $100 m/n to $25 m/n. The total acreage of lands owned is approximately 650,000. The properties of the company are carried on its books at a valuation of $12,674,835 m/n, of which $4,237,489 m/n represents the valuation of the Argentine property, located at Puerto Tirol. At the close of 1916 about 108 leagues of land in the two Republics were covered with quebracho trees' and three industrial establish- ments (which are practically townships) were owned, these estab- lishments having a total producing capacity of 18,000 tons. The company owned and operated 121 kilometers (75 miles) of railway equipped with 9 locomotives and 306 cars. Its property also in- cluded 234 carts and 2,868 oxen. The profits for 1917 totaled $1,614,279 m/n; after amortization, etc., $1,452,829 m/n. A dividend of $10 m/n (40 per cent) was de- clared. The sum of $607,546 m/n was appropriated to reserve and provision funds. Formerly the dividend payments were only nomi- nal ; before the war they rarely exceeded 2 per cent per annum. The $25 m/n shares were quoted on the Buenos Aires Stock Exchange in September, 1917, at $67 m/n per share and prior to selling ex- dividend early in 1917 were quoted at $82 m/n, as compared with an average price of $10 m/n to $11 m/n in 1914. The entire output of the company for the year 1917 was disposed of at very high prices. An increase in capital to $5,250,000 m/n is contemplated, new shares to be distributed among present shareholders. Other companies interested in the industry have benefited greatly through present demands and high prices. The shares of the River Plate Quebracho Co., which has a capitalization of $600,000 o/s and which has not paid dividends for a number of years, have risen in price from $0.45 o/s per $1 o/s share to the September, 1917, quota- tion of $1.05 o/s, and operations are beginning to show substantial profits. OTHER FOREST ACTIVITIES — STATISTICS OF INDUSTRY. Other branches of the forestal industry have developed substan- tially during recent years. Yerba mate or Paraguayan tea is gath- SOUTH AMERICA ARGENTINA. 87 ered in the northern forests in large quantities, there being a large market for the tea throughout the River Plate Republics. There is also a general demand for various kinds of woods for cabinet- making, building purposes, fence posts, firewood, etc. According to the industrial census of 1910, there were in that year 283 aserraderos or sawmills, with a total capital of $16,808,728 m/n and annual sales of $36,153,831 m/n; nine quebracho factories with capital of $8,- 248,013 m/n and annual sales of $9,472,868 m/n; 100 forestal exploita- tion and development companies with capital of $17,273,637 m/n and yearly sales of $12,286,260 m/n. These figures are probably con- siderably below the present status of the industry. The annual value of forest products exported since 1909 has varied between $8,927,362 o/s and $12,254,605 o/s. Recently interest developed in a project to exploit certain Patagonian forest areas for the production of pulp for paper making. Tests that have been made prove that a ton of pulp might be produced from 3£ trees. To protect its forestal areas the Government has appointed inspec- tors and technical experts and has passed laws for conservation. PASTORAL AND AGRICULTURAL DEVELOPMENT. It is in the pastoral and agricultural areas of Argentina that its greatest source of wealth lies. The splendid character of the na- tion's farms and the extent of the cattle and sheep ranches have won world-wide praise. The richness of the cereal lands has been the principal cause of the great influx of settlers who have brought about the rapid development of the Republic. It is to the " camp " — the vast stretches of farming country — that Buenos Aires, Rosario, and the other large cities owe their existence. Agricultural and stock- raising activities have been responsible for the splendid network of railways of which the nation is so justly proud. The vast increase in land values that has followed the growth of the country has created numerous great fortunes for those who bought when prices were low and who successfully managed their properties. STATISTICS OF LIVE STOCK. The number of domestic animals as reported in the live-stock census of 1908 and the estimated total in the year 1915 were as follows : Live stock. Cattle. Horses Mules. Goats. 1908 29,116,125 7,531,376 465,037 3,245,086 1915 29,500,000 9,700,000 580,000 4,520,000 Live stock. Sheep. Asses.. Pigs... 67,211,754 285,088 80,000,000 340,000 3,050,000 In the year 1857 cattle formed 25 per cent of the wealth of the nation. In 1864 there were 10,215,000 cattle ; 20 years later there were 14,171,000 ; in 1894 the total was 21,701,526. In the last-named year horses totaled 4,446,859, and the value of all live stock in the Republic was estimated at $200,600,000 o/s. In 1908 the estimated value was $413,021,767 o/s, and in 1915 $782,000,000 o/s was given as the total 8-8 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. figure. At present prices the live stock of Argentina would probably realize $1,000,000,000 o/s. Cattle and sheep are raised practically all over the pampas and in the north and south of the country. The industry in Patagonia is practically confined to sheep raising. Although there still are areas that have not been taken up for stock-raising purposes, the possi- bility of any considerable increase in the number of animals raised lies in the improvement of existing pasture lands through the cultiva- tion of lucerne and other pasturage. During recent years the stock has been greatly improved through the importation of valuable bulls, rams, and other animals. During the period 1901 to 1914, inclusive, a large number of pedigreed animals were imported, in- cluding 12,761 cattle, 34,597 sheep, 5,558 horses, 3,488 pigs, etc. In the year 1830 there were approximately 3,000,000 sheep in Argentina, and the amount of wool exported was 6,000,000 pounds. In the eighties the number of sheep was approximately equal to the present total, and since that period the industry has not retained its relative importance. Great areas of Patagonian lands will probably always remain pasture land, although it is likely that in time the number of sheep will show a decrease, following the extension of irrigation after the war. BRITISH COMPANIES IN THE FIEED. The pastoral industry in Argentina has naturally attracted con- siderable amounts of foreign capital. A number of pastoral com- panies have been formed, backed by British and German capital. Among the British companies in the field mention may be made of the following (these include agricultural development companies) : Companies. Capital. Companies. Capital. £1,268,914 280,000 740,000 329,487 1,537,382 355,920 405,512 £1,800,000 125,000 300,000 40,000 765,480 200,000 Hiver Plate Land & Fanning Co. <= South American Cattle Farms (Ltd. )d_ Tekla Land Co a Also operates meat-extracting factories. 6 Operates in Argentina and Uruguay. « Also operates sugar plantations. d 10 estancias in Argentina and 9 in Paraguay. A number of the companies listed above are described more fully in the Appendix. Nearly all of the companies are on a dividend basis, and their shares are generally considered sound investments. British investments in land, cattle, sheep, and farming companies probably amount to about $50,000,000 United States currency. Belgium has about $3,500,000 similarly invested. A complete list of German estancias and ranches is not available. INVESTMENT OF ARGENTINIAN CAPITAL. The extent to which local Argentinian capital is invested in land. cattle, and farming enterprises is indicated by the following table of large public companies: SOUTH AMERICA ARGENTINA. 89 Companies. Capitalization. Profit or loss, $o/s. $ro/n. £ sterling. 1914-15." 2,000,000 -S78,888m/ii £3,199 Brucklay Estancia Co. (British) 34,000 100,000 500,000 5,980,000 $68,727m/n EJ Albardon -$3,881m/n 800,000 4,050,000 215,000 $13,493m/n 96,666 Sll,837o/s 6,000,000 2,000,000 2,500,000 $l,039,330m/n J272, 619m/n 8768, 106mAi 600,000 Estancias O'Farrell (Ltda.) 2,000,000 343,635 470,000 S177,418m/n Sl,484m/n $2,500m/n 440,000 t56,861o/s $119,216mAi 600,000 1,000,000 Samuel B. Hale Co. (Ltd.) 5,040,000 $728,168o/s 340,000 300,000 TO $23,867m/n Hill Station $4,587m/n TO 1,301,400 800,000 2,005,200 TO *29,879m/n $34,232o/s $91,203o/s $80,541o/s 183,666 800,000 375,000 5,000,000 573,300 J24,338mAl $57,838m/n 196,582 1,070,000 1,323,500 250,000 $300, 272m/n — $103,088m/n $185, 534m/n 500,000 TO -$149,803o/s («) TO 75,000 32,750 TO ' $ll,930m/n £3,963 240,000 $103,914o/s 50,000 24,000 £13, 100 $110,842m/n 500,000 186,000 TO TO $141,-0000/s TO TO 2,720,000 TO TO $10,824m/n Vicente Pellufio & Co $503,912m/n *» Losses are indicated by minus signs. 1 This is a Belgian company capitalized at 1,250,000 francs. c The head office of this company is in Antwerp, Belgium. The paid-in capital is 14,000,000 francs, and the profits earned for the year were 1,204,097 francs. The Kefinerfa Argentina is one of the largest enterprises of its kind in Argentina. Its paid-up capital is $2,000,000 o/s. Dividends be- fore the war averaged 7£ per cent; for the years 1915 and 1916 the rate was '6 per cent. No recent quotation for the shares is available (97.50 in 1912). Three other important sugar refineries and properties, locsilly owned, are the Ingenio y Refineria Santa Ana (Ltda.), the Ingenio 94 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. San Miguel, and the Nueva Compania Azucarera y Refineria Ledes- ma (Ledesma, Jujuy). The respective capitalizations of these three companies are $8,500,000 m/n, $1,000,000 m/n, and $10,000,000 m/n. MEAT-PACKING COMPANIES. The extent and development of the great "meat-packing industry in the River Plate countries is little realized by those who have ne^er with their own eyes investigated this field of enterprise. Argentina, of course, stands foremost in this industry, although Uruguay, Brazil, Paraguay, and other South American countries are pro- gressing, particularly as cattle producers. Despite the increasing share of the world's meat trade that is being obtained by these Re- publics, Argentina will not lose its prominence. The United States, which in 1907 exported 282,000,000 tons of beef, so increased in population that at the outbreak of the war the annual exports had dropped to 6.400,000 tons, while the exports of beef cattle dropped from 585,000 to 22,000 head. In addition, the United States has been purchasing beef from Argentina and elsewhere. Argentina has spent millions on the importation of pedigreed stock, and to this is due the present high quality of its meat. Argentina commenced its shipments of frozen and chilled meats to Europe as early as 1877. Within the next few years the ' industry developed by leaps and bounds, largely owing to the investment of foreign (particularly British) capital. Within the last few years (since 1907) the United States has become a real factor in the meat business of Argentina, and as" will be shown later, American investments in this field have resulted in substantial profits. Formerly the entire meat-producing industry centered in the Province of Buenos Aires, within reasonable distance of the River Plate. During recent years, however, at- tention has been drawn to Patagonia, and plants have been erected at Rio Gallegos, San Julien, and Puerto Deseado, Territory of Santa Cruz, and a syndicate has been formed to establish freezing and canning works in the Argentine Territory of Tierra del Fuego. Ten meat-freezing establishments are in operation at the present time in the Province of Bueno Aires. During 1916 these 10 establish- ments slaughtered 1,925,281 head of cattle, 2,334,937 sheep, and 64,996 pigs, representing a cost price to the meat establishments of $361,012,165 m/n. The 10 establishments represent an invested capital of $116,374,774 o/s, and employed a total of 939 machines, of which 585 are worked by electricity, 158 by hydraulics, and 196 by steam, the combined horsepower being 28,922. In 1916 the em- ployees in these plants numbered 15,492. Practically all the British companies engaged in the meat-freezing industry, as well as the two important local concerns, are described in the Appendix. It may be of interest to indicate the profits of the energetic American concerns that have entered the field. The fol- lowing table shows the paid-up capital that these companies have invested in Argentina, and also their profits from operation for the calendar year 1916: SOUTH AMERICA ARGENTINA. 95 Companies. Paid-up capital (in Argentina). Profits, 1916. Armour & Co .. . . io/s. 3,000,000 1,500,000 7,500,000 300,000 to/s. "672,463 6 1,520,901 2,758,940 915,035 La Blanca (Morris- Armour) Swift* Co Argentine Central (Wilson) Total 12,300,000 5,867,339 o Year ended June 30, 1916. 6 After allowing $100,000 depreciation. The Armour & Co. La Plata plant was inaugurated July 4, 1916, the cost, it is stated, having been $3,500,000 o/s. The plant is located at Rio Santiago, Gran Dock, La Plata, and covers 20 acres. Its official name is Frigorifico Armour de la Plata. The La Blanca Co. plant formerly belonged to Swift & Co., but in 1912 was acquired by the Armour and Morris companies. It is inter- esting to compare the 1916 profits ($1,520,901 o/s, as above) with those for 1914, when they totaled $276,704 o/s and returned a divi- dend of 10 per cent. Swift & Co.'s La Plata Cold Storage Co., which in 1916 showed a profit of $2,758,940 o/s (as above) , was registered October, 1910. Net profits for 1914 were $1,518,575 o/s. There has been, therefore, a substantial increase during the years of war. The Sociedad Anonima Frigorifico Argentino Central, owned and operated by Wilson & Co., reported, as stated above, a profit for the calendar year 1916 of $915,035 o/s, which, added to the balance of $1,121,974 o/s carried forward from 1915, made a total of $2,037,- 009 o/s, of which $1,990,169 o/s was carried forward after dividend payments. The paid-up capital consists of $240,000 7 per cent pre- ferred and $60,000 common. Although the British meat-freezing companies have enjoyed large earnings, their divided profits since the war have not been ex- ceptionally large, owing to the excess-profits tax. Quotations of a few of these shares follow: Securities. Amount. Par value. High price since 1911. Price January, 1918. British & Argentine Meat ordinary Argentine Estates of Bovril preference. Smithfleld & Argentine Meat ordinary Liebig's Extract of Meat ordinary £1,033,000 400,000 325,000 600,000 £1 1 1 5 23S. "It 24 22s. 23J The capitalization of the British & Argentine Meat Co., including debentures, is as follows: Ordinary, £1,033,000; 6 per cent cumulative and participating preference, £449,500; 5 per cent first debenture stock, £73,523 ; 6 per cent redeemable debenture stock, £572,865 ; total capitalization, £2,098,888. The dividend payment for 1915-16 was 12£ per cent. The property is located at Campana, Province of Buenos Aires. The Argentine Estates of Bovril is capitalized as follows: Ordi- nary, £241,014; 6 per cent cumulative and participating preference, £400,000 ; 4£ per cent debentures and debenture stock, £427,900 ; 5£ per cent debenture stock, £200,000 ; total capitalization, £1,268,914. Eeg- 96 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. ular dividends of 6 per cent were paid on the preference shares to and including 1913-14. In each of the years 19i5 and 1916 3 per cent was paid, and in 1917 4 per cent was paid. No dividends are being paid on the ordinary shares. The ordinary shares of the Smithfield & Argentine Meat Co. (Ltd.) represent its entire capitalization. The dividend payment on this stock for 1916 was 15 per cent. The plant of this company is located at Zarate, in the northern part of the Province of Buenos Aires. The capitalization of the Liebig's Extract of Meat Co. consists of £600,000 ordinary shares, £1,000,000 5 per cent preference shares, and £400,000 other obligations— a total of £2,000,000. In addition to its properties in Argentina this company owns lands and factories in Uruguay, Rhodesia, and Southwest Africa. The 1916 dividend on the ordinary shares was 25 per cent. The Compafifa Sansinena de Carnes Congeladas (Ltda.) is a very important locally owned meat-freezing company. It is headed by Carlos A. Tornquist and numbers among its directors Mr. Samuel Hale Pearson. The company has outstanding $3,000,000 o/s ordinary shares, $1,500,000 o/s 6 per cent preference shares, and £140,000 5 per cent debentures. The ordinary shares received 25 per cent in divi- dends in 1915 and hi 1916, as compared with an average of 10 per cent per annum before the war. The shares are listed on the Buenos Aires Stock Exchange and sell at about $140 o/s per share. The debentures are quoted on the London Stock Exchange. The freezing establishments are located at Avellaneda (a suburb of Buenos Aires) and at Bahia Blanca. They are known as " La Negra " and " Cuatreros." Exports of the leading meat- freezing companies for the six months ended June 30, 1917, were as follows (slightly less than for the simi- lar period during 1916) : Companies. Frozen Quarters sheep and frozen lambs. beef. 125,543 102,755 208,663 715, 584 112, 514 282,222 116,393 366,200 40,890 131,395 102,741 118,200 164,713 341, 326 54,597 78,484 Quarters chilled beef. Cia. Sansinena de Carnes Congeladas lis Palmas Produce Co. (British & Argentine Meat Co.) La Blanca (Morris-Armour) Swift & Co. (La Plata) Argentine Central (Wilson &Co.) Smithfield & Argentina Armour de la Plata Anglo-South American Meat Co 24,336 63,255 50,003 120,526 22,506 23,723 47,504 The New Patagonia Meat-& Cold Storage Co. (controlled by Swift & Co., capital £100.000), the Compahia Frigorifica de Patagonia, and the Sociedad Exploration de Tierra del Fuego did not directly export any meat during the period mentioned, presumably on account of the scarcity of ship tonnage. Further facts concerning the River Plate meat industry will be found in the chapter on Uruguay, as well as in the Appendix. It need scarcely be said that the industry is enjoying unprecedented prosperity — a condition that is likely to outlast the European war for a considerable period of time. Every variety of animal product is in demand at the present time, and. despite the strikes and labor troubles with which the companies have had to contend at times, the returns will continue to be large. SOUTH AMERICA ARGENTINA. 97 MANUFACTURING AND COMMERCIAL PURSUITS. Argentina as a nation is engaged primarily in pastoral and agri- cultural rather than commercial pursuits. Notwithstanding that fact, manufacturing has developed to a moderate extent and has attracted a fair amount of capital, some of which has come from European sources. In the following table, transmitted by Commercial Attache Robert S. Barrett, is a statement of the industries of the country as shown by the census of 1913, with the number of establishments, capital invested, total production, raw material consumed, horse- power used, and number of persons employed. The values in Argen- tine paper currency have been converted into United States currency at the rate of 42.5 cents. Kind of industry. Number of estab- lish- ments. Capital invested. Total pro- duction. Raw material consumed. Horse- power used. Number of per- sons em- ployed. Meat packing houses , Flour mills Sugar refineries Preparation of wine Bakeries Foundries and metal works Cigarette factories Dairies, cheese factories, etc Tailors Leather shoes Sawmills Extracts of tannin and prep- aration of firewood Jute and cotton sacks Lithographers and printers Breweries Carpentry, painting, and horse' shoeing Liquors Tanneries Woodworking Cotton and woolen mills Furniture, trunks, and tapes- try Leather goods Brick kilns Preparation of her va matter . . . Soap factories Clothing, etc Chocolate and candy Wagons and carriages Macaroni and pastes Ice and aerated waters Hope and cloth shoes Match factories Crackers and cakes Jewelry, watches, etc Hats Paper and cardboard mills Alcohol Dressmakers Tinsmiths, etc Preparing and refining oil Fishing Coffee roasters, etc Cigars and toeacco Confectionery Glass factories Gas fitters, etc Cleaners and dyers Artistic iron work Petroleum refineries Washing wool Ore smelting Preparation of salted hides — Construction companies Paving companies Light and power companies. . . Grain elevators Other 13 401 44 4,317 3,242 1,177 55 8,161 3,083 231 305 493 . 24 938 29 4,681 326 189 736 81 $39, 521, 561 36,878,953 51,055,362 77,658,543 13, 634, MO 25,389,184 13, 552, 3f£ 42, 833, 791 14,305,803 9,126,084 8,940,018 33,212,346 8,970,475 12,338,093 13,702,876 9,970,046 8,984,383 8, 396, 155 4, 843, 097 9, 155, 267 1,058 9, 242, 590 986 5,349,305 953 7,545,538 31 3, 137, 775 294 4,111,091 448 5,698,993 299 4, 672, 106 1,270 6, 437, 754 332 4,601,288 742 7, 973, 585 241 3, 714, 781 16 975, 163 207 2, 800, 278 769 4, 198, 454 92 2, 671, 231 11 4, 922, 945 187 3,935,447 574 2, 474, 434 974 1,930,730 22 1, 759, 411 4 1, 957, 295 54 1, 537, 225 179 1, 579, 330 185 1, 493, 698 16 2, 479, 875 353 2, 215, 845 124 1,478,283 35 987, 308 1 3, 187, 500 10 673, 731 29 8, 741, 770 8 68, 425 197 10, 587, 395 14 3, 853, 914 305 127, 875, 724 19 8,641,962 0,971 47, 173, 084 $114,004,927 63,282,112 59,754,304 36,248,745 34,709,770 24,987,634 22,471,474 22,439,534 21, 554, 202 20, 884, 830 19, 220, 005 17, 778, 903 16, 200, 466 15, 409, 435 15, 103, 839 15, 150, 120 13, 775, 247 13, 055, 719 12, 503, 539 10, 722, 594 9,771,501 9, 746, 658 9,383,312 9, 328, 448 9, 123, 774 8,772,495 8,761,916 8,519,085 8,261,764 7,290,659 7, 133, 667 5,951,700 4,451,572 4, 098, 250 3, 662, 194 3,616,611 3,364,134 3, 300, 508 2, 878, 153 2, 750, 706 2, 416, 961 2, 300, 725 2, 162, 705 2,024,445 1, 807, 950 1, 803, 173 1,455,873 1, 434, 744 1,062,500 1,038,545 744, 987 209, 950 6,397,755 $98,109,228 52,038,119 34, 438, 136 17, 449, 659 19,236,188 12,851,834 6, 553, 601 12, 565, 114 14, 750, 637 11,800,976 14,059,505 13, 739, 072 5, 380, 739 3,366,630 6, 257, 618 7, 621, 173 8,933,491 6,674,605 5,993,741 3, 798, 159 5,968,603 2,126,196 5, 327. 953 6, 340, 394 4, 420, 091 6, 108, 327 3,698,430 5,792,369 2,772,847 3, 892, 221 1, 508, 819 2,369,431 1, 922, 813 1,825,152 1,914,971 128, 775 1,110,719 1, 053, 603 1, 987, 128 10, 625 1, 542, 618 1,111,775 1, 126, 378 537, 838 702, 638 201,358 622, 541 637, 500 748, 255 4, 250 169, 788 3, 056, 876 62, 487, 327 33, 614, 817 24,287 26, c31 57,511 14, 651 6,514 14, 161 1,191 3,317 34 2,388 13, 514 12, 874 1,248 2,985 8,680 3,970 1,518 5,416 6,906 6,887 2,206 326 2,090 1,128 964 657 2,337 3,882 4,216 7,965 1,097 610 588 43 1,298 10,860 1,456 15 133 969 17 191 95 113 269 25 1,031 242 265 • 885 797 55 565 140 391, 959 6,137 18,479 Total.. 48, 779 759, 756, 475 791,260,627 461,881,333 678, 757 63018°— 18- 98 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The census of 1913 was the first complete survey of Argentine industries that has ever been made. In 1895 a partial census was taken, which'showed that the number of establishments at that time was 22,114. Since the statistics for the 1913 census were obtained there has been a marked increase in the number of manufacturing establish- ments in the country. Many articles that were formerly imported from abroad and that can not be obtained from foreign sources at present are now made locally, and the high prices for foreign-made goods in the countries where they are produced, together with the exorbitant freight rates, have made the manufacture of these articles in Argentina very profitable. Concerns in general commercial lines in Argentina, as of the year 1916, numbered as follows : Localities. Number of con- cerns. Annual busi- ness. Capitaliza- tion. Number of em- ployees. 20,690 21,654 1 m/n 2,232,506,291 1,094,081,592 750,320,546 447,437,758 118,360 Provinces ol Cordoba, Mendoza, Santa Fe, and San 58,660 42,344 3,326,587,883 1,197,758,304 177,020 In addition to the above there were 71 telephone companies, capi- talized at $34,750,423 m/n and employing 4,494 persons; 143 banks, capitalized at $1,255,533,077 m/n and employing 10,834 persons; and 85 insurance companies, capitalized at $74,056,270 m/n and employ- ing 1,549 persons. The brewing industry in Argentina dates from 1868. In 1917 there were 25 breweries, with share and debenture capital of $32,- 489,800 m/n and $5,246,418 m/n, respectively. The capital invested in buildings, machinery, and raw material amounted to $64,248,020 m/n. The output of the breweries for 1915-16 was 77,085,933 liters (20,363,831 gallons), as compared with 116,321,488 liters (30,728,698 gallons) in 1913-14. The capacity of the establishments is 177,- 790,000 liters (46,966,865 gallons) annually. Gross sales for 1915-16 were $26,299,556 m/n, as compared with approximately $27,000,000 m/n in 1914-15 and approximately $38,000,000 m/n in 1913-14. Taxes paid amounted to $4,036,426 m/n. Bieckert's Brewery is about the only one whose shares are known abroad. This company's shares have declined somewhat in price, as is shown by the following table : Securities. Ordinary shares Preference shares ( 5 per cent ) 4 per cent first debenture stock 5 per cent irredeemable debentures £375,000 311,000 92,000 100,000 High price since 1911. 138 97 Price January, 1918. 72 67 70 77 In addition to the above capitalization there is outstanding a small issue of 6 per cent debentures. The dividend rate on the ordinary shares for 1917 was 5 per cent (1913, 9 per cent). SOUTH AMERICA ARGENTINA. 99 The Distileria, Bodegas y Cerveceria Germania (also engaged in the manufacture and sale of liquors and wines) is capitalized at $3,000,- 000 o/s ordinary and $1,500,000 o/s 7 per cent preference shares. Dividends on the ordinary shares in recent years have been as fol- lows : 1911 and 1912, 16 per cent; 1913, 16 per cent; 1914, 14 per cent; 1915, 11 per cent; and 1916, 12 per cent. The preference shares sell (September, 1917) at par to 102 per cent and the ordinary at 150 per cent. In 19l4 the ordinary shares were quoted at 170 per cent and in 1913 at 187 per cent. Most of the securities of the company are lo- cally held. The Cerveceria Palermo, a brewery whose shares are held in Argen- tina, is capitalized at $1,000,000 m/n ordinary and $500,000 o/s pref- erence. No dividends were paid on the ordinary shares during 1916. Formerly the rate averaged from 6 to 9 per cent. Dividends of 3 per cent are paid on the ordinary shares of the Cer- veceria Segundo. Formerly the rate was 9 to 10 per cent. A few of the various industrial companies, wholly or partly financed abroad, are the Argentine Hennery, the Argentine Tobacco Co., the Argentine Navigation Co., the Argentine Iron & Steel Co., and the Catalinas Warehouses & Mole Co. Among the commercial com- panies are Harrods and the Gath & Chavez South American Stores- two leading department stores — the City of Buenos Aires Central Produce Market, the Argentine Central Leather Co., etc. A brief description of most of these companies will be found in the Appendix. Shares of industries and commercial companies held locally in Ar- gentina and actively quoted are not numerous. The $50 o/s shares of the Central Fruit Market (capital $3,000,000 o/s) were quoted in Sep- tember, 1917, at $85 o/s (1916 dividend 12 per cent). Introductora de Buenos Aires (importers) shares were quoted at the same time at 118 (10 per cent is paid), the capitalization being $1,000,000 o/s. Argen- tina de Papel (paper) shares are quoted (September, 1917) at $48 ($50 par) as compared with $130 high in 1913 and $35 in 1915. Twelve per cent was paid on these shares in 1916. The Compahia General de Fos- foros (match factory) is capitalized at $5,100,000 m/n; 25 per cent per annum is paid on the shares, which were quoted in September, 1917, at 320 per cent. These shares in 1913 reached a price of 450 per cent. Puerto San Nicolas shares ($7,425,000 m/n) were quoted in Septem- ber, 1917, at $20 m/n (par $45 m/n), as compared with the high price of $63.50 m/n in 1913. The dividend rate on these shares for 1916 was 2.2 per cent. This company operates the port and docks at San Nicolas on the Central Argentine Railway. A still larger port company is the Muelles y Depositos del Puerto de la Plata, own- ing a wharf and warehouses at La Plata and capitalized at $6,400,000 o/s. The latest dividend on these shares was 1.6 per cent, and the September, 1917, price was $18 o/s per $25 o/s share. In addition to the few manufacturing, commercial, and miscel- laneous concerns mentioned above, there are a number with capitali- zations ranging from $1,000,000 to $10,000,000 and upward. The subject is too exhaustive to be dealt with fully. Generally speaking, the various manufacturing enterprises are on a sound and paying basis, despite high costs of fuel and power. It is hardly necessary to repeat the statement that Argentina is, and will continue to be for many years, an agricultural and pastoral country. LIBRARY NOV 4 . 1943 BOLIVIA. INTRODUCTION. The area of Bolivia is estimated at from 473,560 to 704,195 square miles — equal, if the latter figure is correct, to more than 14 times the size of New York State or 2f times the size of Texas. Its population is stated to be about 2,500,000. The Bepublic is one of the richest mineral countries in the world and is destined in the not distant future to increase considerably its output of tin, silver, copper, and other valuable products. Improved railway facilities and the ac- tivity and enterprise of a thoroughly progressive Government are placing the resources of this vast yet thinly settled country within reach of foreign markets. Although most of the country's develop- ment has taken place within its great central plateau, where prac- tically all of its mines are located, the greatest future opportuni- ties — once means of communication are established — exist, it is said, on the eastern slope of the Andes and among the plains in the east- ern and southern parts of the Bepublic. The area of possible culti- vation in this section covers many thousands of square miles, and nearly every product of the Torrid and Temperate Zones may be suc- cessfully grown. In the forests of the extreme eastern lowlands may be found mahogany, ebony, cedar, rosewood, satinwood, rub- ber, cork, etc. Thousands of wild cattle thrive on the long grasses of the southeastern plains; wild coffee, for which there is a ready domestic market, is found, as are vanilla and other tropical products. Bolivia's foreign trade for the years 1912 to 1915 is here shown: Years. Imports. Exports. Total trade. $19, 258, 996 21,357,503 15,506,876 9,009,826 $35,057,841 36,551,390 25, 662, 447 38,084,144 $54,316,837 57,908,895 41,189,323 47,093,970 In the year 1902 imports amounted to approximately $5,600,000 and exports to approximately $11,100,000. The chief cities of Bolivia are La Paz, the highest capital city in the world, lying in a circular valley about 11,900 feet above the sea (population, 85,000) ; Cochabamba, which on account of its location is expected to grow rapidly in size and importance (population, 27,000) ; Potosi, a mining city (population, 25,000) ; Sucre, the nomi- nal capital (population, 24,000) ; Oruro, an important mining and trading center (population, 22,000) ; and Santa Cruz, the most important center of eastern Bolivia (population, 20,000). Bolivia has upward of 5,600 miles of navigable rivers, all (except the Desaguadero, 185 miles) flowing in the direction of the Atlantic Ocean by way of the Amazon or the Paraguay — the latter an affluent of the Biver Plate. Lake Titicaca, the great inland body of water, forming a section of the boundary between Bolivia and Peru, covers 100 SOOTH AMERICA — BOLIVIA. 101 an area of 5,187 square miles and is navigable for steamers of consid- erable size. At the present time navigation is confined to the Peru- vian Corporation's fleet of small steamers (650 to 1,000 tons), a few small sailing vessels, and a number of native balsas or reed boats. There are few industries of importance on this lake. On the shores of the lake and along the slopes of the near-by Sierras are some of the finest grazing lands in South America. The country, with its excellent water supply, is better adapted for sheep raising than Aus- tralia. Land values are low, and labor is cheap and plentiful. The quality of the sheep found in this district is poor, owing to the pres- ent general lack of knowledge concerning breeding methods. Excel- lent opportunities exist for the ranching of sheep on a large scale, provided good sheep are imported for breeding purposes. The In- dians, who form a very large percentage of the population of the lake district, devote themselves mainly to agriculture and fishing. Their methods are similar to those in use thousands of years ago. The produce raised by these Indians finds a ready market in La Paz and other places on the Bolivian plateau. Among the various Departments and Territories of Bolivia La Paz is the most important. It contains approximately one-fifth of the nation's population. Three of Bolivia's most important railways enter the Department, affording means of communication with Peru and Chile and with various parts of the Republic. Oruro is prob- ably next in importance to La Paz, containing as it does considerable mineral wealth, although little agricultural land is available. Oruro, the capital of the Department, is a railroad center of some impor- tance. Potosi, which was long the treasure house of Bolivia but which some years ago declined in importance, is evidencing returning prosperity since the completion of the railway to Potosi, its capital city. The Department of Chuquisaca, in which is located Sucre, the nominal capital of the Eepublic, contains a number of mines and some manufacturing industries. The Department will increase in importance when railway communication is established with Sucre. Cochabamba is believed by many to be the Department holding the greatest promise for the future. Splendid fruit and agricultural lands are found there, as well as minerals of various kinds. Cocha- bamba, its capital, is the main center for the purchase of supplies for the Beni River district and other sections of eastern Bolivia. Several rivers water the Department. In eastern and central Bolivia — the lower country — Santa Cruz is the most important among the Departments and Territories. Its area exceeds 140,000 square miles, and its population is about 200,000. Sugar, cotton, coffee, rice, maize, tobacco, and similar products are being cultivated in increasing quantities. Mahogany and other hard- woods, dyewoods, and other forest products, including rubber, are found. In this Department there are large petroleum deposits of a rich quality, which will certainly be profitably exploited when rail- way communications are established with the mining country to the westward or with Argentina. Salt, coal, gold, tin, copper, iron, and other minerals exist in this region. It is an extremely rich country, awaitmg the day when better means of communication will place its resources "before the outside world. Railways into the district are projected, but will probably not be built at this time. The Acre Territory and the Beni Department are thinly settled, containing 102 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. mostly wild Indians. Puerto Acre, the capital of the Acre Terri- tory, is in communication with the Amazon, via steamer and the Madeira-Mamore Eailway (see Brazil, p. 155). Rubber is the princi- pal resource of that Territpry, although the forests contain vast undeveloped timber wealth, unavailable now because of the cost of transportation. The climate during the rainy season is unhealthful. The Beni Department contains large quantities of rubber in its for- ests. On the great stretches of open plains are large herds of wild cattle. Tropical plants and fruits, as well as maize, tobacco, and rice, thrive in this district. GOVERNMENT LOANS AND FINANCES. Bolivia's financial record has been an excellent one. The Eepublic has carried on its development work slowly and carefully and de- serves high credit for the manner in which it has taken care of its' foreign obligations. Its external debt is far from excessive and mostly represents expenditures for improvements that have done much to open the country for settlement and development. As of June 30, 1917, the debt of the Republic amounted to 63,813,- 895 bolivianos (equivalent to $24,842,749 United States currency), divided thus: External debt, 40,642,151 bolivianos ($15,821,989 United States currency) ; internal debt, 23,171.744 bolivianos ($9,020,- 760). On the date mentioned the external debts were as follows: Items. Amount. Bolivianos United States currency. Morgan loan of 1909; 6 per cent: original issue 82,432,500; balance amortized French loan of 1910; issued by the Creait Mobilier of Paris; secured by export duty on minerals and rubber and, in event of deficit, on general revenues; tax-free in Bo'ivia; interest rate5percent; sinking fund U per cent; original issue $7,213,750 Frenchloan of 1913, for the construction of the La Quiaca-Tupiza Eailway; origi- nal issue $4,865,000; interest 5 per cent, and sinking fund Warrants to bankers, 1910 loan Chandler & Co.; interest and amortization payable by Department of La Paz.. $1,921,255 6, 702, 967 17,218,000 '11,976.500 I 4,662,451 262,500 I 1"2.191 6,250,000 2,433,125 The outstanding external debt on June 30, 1917. amounted to 4,301,555 bolivianos ($1,674,594) more than on June 30. 1916. The internal debt during the same period showed an increase from 16.870,- 760 bolivianos ($6,567,785) to 23,171,744 bolivianos ($9,020,760). The 5 per cent Credit Mobilier Loan, floated in Paris, was offered for subscription in November, 1910. at a price of 485 francs per 504- franc bond (96.2 per cent). The bonds were readily absorbed by banks and investors, and during the years 1911 and 1912 sold regu- larly above par. Recently the bonds, owing largely to war condi- tions, sold on the Paris Bourse at 405 francs. The bonds are re- payable in or before November, 1940, by means of the sinking fund. The Morgan Loan was largely repurchased by the Government sev- eral years ago, but bonds, other than those amortized, have not been canceled. During the year ended June 30, 1917, Bolivia paid up the- National Citv Bank loan, which on June 30. 1916. had been outstanding to the 'amount of 1,274,167 bolivianos ($496,033). SOUTH AMERICA BOLIVIA. 103 A loan was recently contracted with the American banking firm of Chandler & Co. to provide funds to construct the Yungas Railway, ex- tending from La Paz into the Province of Yungas, Department of La Paz. This loan was for $2,433,125, and the rate is believed to be 6 per cent. Among the Republic's internal obligations, the so-called Bonds Militar are quoted at 85. They carry 10 per cent interest. A loan for £96,500 was created by the Government in October, 1916, and was subscribed for proportionately by the various Bolivian banks. The Government repaid this loan in January, 1917. The service of loans, 1915-16, required 2,957,763 bolivianos. As stated, Bolivia has made a very creditable financial record. The revenues of the Government were first affected seriously by the col- lapse of the rubber industry, due to the drop in price and to plan- tation-rubber competition. This was followed almost immediately by the war, which for the time being caused a crash in the price of tin and paralyzed the foreign trade of the country. The year 1914 was also characterized by a crop failure, and the Government was virtually compelled to suspend duties on various necessary imports. Recovery was slow in the extreme, and even to-day imports and import duties are below normal, although the country is enjoying a comparative boom in its mineral industry. The Republic emerged from the storm successfully and is now practically reestablished on a sound financial basis. The end of the war will cause a vast increase in imports, as merchants' stocks throughout the entire Republic are very low. MUNICIPAL LOANS. None of the Bolivian municipalities have any external bonds out- standing. Some of the cities have borrowed sums for municipal improvements either from banks or from other local interests. None of these loans are large. Bonds of the city of La Paz, which are occasionally dealt in locally and which are entitled to interest at the rate of 10 per cent per annum, sell at 60. Interest is said to be paid somewhat irregularly. ,La Paz is seeking arrangements whereby better sewerage facilities may be obtained and a filtration system provided for the purification of the water used in the city. The revenues of the two systems are offered as security. It is said that well-known American financial interests are investigating the propo- sition. BANKS. The banks of Bolivia as of June 30, 1916, had a total capitalization of $16,365,000. Deposits on that date amounted to $10,949.9<">5. Gold reserves were £1,016,986. Paper currency amounted to $9,691,197. Reserves of the banks totaled $2,394,304. The leading banks of Bolivia are the Bank of the Bolivian Nation (Banco de la Nacion Boliviana), the National Bank of Bolivia (Banco Nacional de Bolivia), the Francisco Argandona Bank (Banco Francisco Argandona), the Mercantile Bank (Banco Mercantil), the German Transatlantic Bank (Banco Aleman Transatlantic*)), and the banking house of Gutierrez Guerra (Casa Bancaria Gutier- 104 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. rez Guerra). There is also a National Mortgage Bank (Banco Hipo- tecario Nacional), which was incorporated in La Paz in 1890. In Sucre there is a similar institution — the Banco Hipotecario Garan- tizador de Valores. The Bank of the Bolivian Nation was founded in 1911, largely for the purpose of standardizing the then widely fluctuating foreign- exchange market. . It absorbed the Banco Industrial and another institution. The Government used £1,000,000 of the proceeds of the French loan of 1910 to establish this bank. The capitalization was fixed at £1,114,000, of which the Government acquired £1,000,000 shares at par. The remaining shares were offered for subscription and were acquired largely by French capitalists, although some of the shares are held in La Paz. Profits for 1916 amounted to approxi- mately $883,025, equal to nearly 13 per cent on the stock. Deposits at the leading branches were divided in the following proportions: Cochabamba, 32.31 per cent ; Sucre, 22.71 per cent ; La Paz, 19.77 per cent; Potosi, 19.05 per cent; Tarija, 6.16 per cent. Branches also exist in Oruro, Santa Cruz, and El Beni. Six of these branches are operated with profit. Dividends for the year amounted to 12s., equal to 6 per cent. Eugenio Carpentier, of La Paz, is the director general. Shares of the bank are quoted in La Paz at 105. The National Bank of Bolivia was established in the year 1870. Its authorized capital is £1,000,000, or 12,500,000 bolivianos'; 8,000,000 bolivianos of the capital is paid in. There is a fund for reserve of 1,600,000 bolivianos and other funds for dividends, etc., totaling 792,105 bolivianos. The head office of this institution is at Sucre, and there are branches at La Paz, Oruro, Cochabamba, Potosi, Tarija, Tupiza, and Uyuni. The bank's shares are quoted at 128. The Francisco Argandoha Bank is capitalized at 4,000,000 bo- livianos. Its head office is at Sucre, and there are branches at La Paz, Cochabamba, Oruro, and Potosi. The shares of the bank were quoted at 65 in April, 1917. The Mercantile Bank is a private organization controlled by Sefior Simon T. Patino. Its head office is at Oruro, with branches at La Paz, Uyuni, Cochabamba, Tupiza, Sucre, Potosi, Santa Cruz, and Tarija. The capitalization of the bank is £2,000,000. As the shares are privately owned there is no quotation for them. The German Transatlantic Bank, a German organization that in past years was a power in South America, has an establishment at La Paz. There is a branch at Oruro and agencies in other cities. The bank's Bolivian operations are said to have resulted very profitably. Shares of this bank are not quoted in Bolivia. Shares of the National Mortgage Bank are quoted at 320. The capitalization of the bank is 100,000 bolivianos. The Sucre mortgage bank is also capitalized at 100.000 bolivianos. This institution main- tains a branch at Cochabamba. Its president is J. A. Fernandez. The Mercantile Bank maintains a mortgage department (seccion hipotecario), which is capitalized at 800,000 bolivianos. There is also a somewhat similar organization known as the Credito Hipo- tecario de Bolivia. This is capitalized at 560,000 bolivianos. Bolivian merchants seem to be of the almost universal opinion that an American branch bank would be successful in the Republic. SOUTH AMEBIC A BOLIVIA. 105 RAILWAY DEVELOPMENT. On July 4, 1917, following the establishment of train service to Cochabamba, Bolivia had approximately 840 miles of railway. Final completion of lines under active construction will, within the next two or three years, increase the mileage to about 1,100; and if the elaborate program of railway construction as projected is carried out, the country will in time possess more than 3,000 miles of line. There are, as is generally known, three railway outlets for the com- merce of Bolivia: (1) the Antofagasta & Bolivia Railway, to Anto- fagasta, Chile; (2) the Arica-La Paz Railway, to Arica, Chile; (3) the Guaqui-La Paz Railway, which connects with the steamers on Lake Titicaca running to Puno, Peru, where connections are afforded with the Peruvian Southern Railway to Mollendo, Peru. Of these three railways the most important is the Antofagasta & Bolivia . Railway, the longest and oldest line in the Republic. ANTOFAGASTA & BOLIVIA RAILWAY. The Antofagasta & Bolivia Railway was. built originally to pro- vide an outlet for the nitrate properties of the Compania Salitres de Antofagasta. No outlet existing for the mineral products of the Huanchaca Mine, located at Huanchaca, near Uyuni, Bolivia, the owners of the mine purchased the railway. This was in 1884. The line was completed as far as Uyuni in the year 1888. In 1889 the property was disposed of to the present company for approxi- mately $10,000,000. The road was continued to Oruro in 1892, and from that time began an expansion of earnings and profits. To- day the railway is one of the best managed and most profitable in South America. It has taken over, under lease, the Bolivia Rail- way, hereinafter described, and now presents a through route be- tween La Paz, Potosi, Oruro, and other important Bolivian cities and the Pacific ports of Antofagasta and Mejillones, Chile. Gross earnings from the railway (Chilean and Bolivian sections) for the calendar year 1915 amounted to £1,220,581 ($5,939,950), as com- pared with £1,430,927 ($6,963,600) in 1914 and £1,811,775 ($8,817,000) in 1913. In 1916 gross earnings increased to £1,852,655 ($9,015,946) and in 1917 to £2,239,384 ($10,897,962). The Bolivian section of the Antofagasta & Bolivia Railway, with which the present discussion deals, is 302 miles in length, not includ- ing the Bolivia Railway section. Earnings of this division for 1915 amounted to £184,556 ($898,140), as compared with £281,359 ($1,369,- 235) in 1914. Net earnings for 1915 were £75,556 ($367,695), as compared with £132,264 ($643,665) in 1914. Passengers carried on the Bolivian section during 1915 numbered 23,466 first-class (31,444 in 1914) and 89,705 second-class (133,307 in 1914). There was a corresponding decrease in passenger receipts from £37,503 ($182,500) to £22,304 ($108,540). In 1916 and 1917 gross earnings of the Bolivian section totaled £249,209 ($1,212,776) and £318,486 ($1,549,- 912), respectively. Net earnings for the two years were £79,213 ($385,490) and £129,654 ($630,961). Both freight and passenger business showed a consistent increase. During 1915, 33,132 tons of tin were carried, as compared with 38,022 tons in 1914; in 1916 there was a further increase in the 106 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. amount transported. A total of 32,528 tons of silver in bulk was handled in 1915, against 34,715 tons in 1914. The haul of this mineral is comparatively short — Oruro to the smelters. The traffic in antimony is also quite important, 15,207 tons being carried in 1915, as compared with only 181 tons in 1914. This traffic, which was also large in 1916, may be said to be temporary, as all of this mineral is shipped for use in the European war. Metals from the Huanchaca mines, largely zinc blends, were carried to the amount of 8,369 tons, as compared with 13,836 tons in 1914. Up traffic in coal, flour, and general merchandise in 1915 was also considerably less than in 1914. It is expected that the opening of the Cochabamba line (Bolivia Railway) in July, 1917, will bring additional traffic to the main line. The meter (3.28-foot) gauge line between Oruro and Uyuni was completed in February, 1916, and it is expected that the remainder of the 2.5-foot gauge will be broadened in the not distant future. At the present time semiweekly train service is maintained between La Paz and Antqfagasta, the trip taking 40 hours on the down run and 43 hours on the up run. Trains for Bolivia leave Antofagasta Tuesdays and Saturdays at 8 p. m. The down trains leave La Paz Tuesdays and Fridays at 2 p. m. In addition, train service is maintained over the Bolivia Railway sec- tion between La Paz and Oruro daily except Wednesday, while two or three mixed trains a week Fun between other Bolivian points. The Antofagasta & Bolivia Railway had in service December 31, 1915 (not including Bolivia Railway), 163 locomotives, 112 passen- ger cars, 3,247 freight cars, and 146 lighters, launches, etc. The Bolivia Railway, whose lines have been leased by the Anto- fagasta & Bolivia Railway, was incorporated in the United States in 1907 and holds a perpetual concession from the Government of Bolivia for the construction of lines of railway in the Republic — in all about 773 miles. This mileage includes the following : (1) Oruro-Viachi line (continuing the Antofagasta & Bolivia Railway to La Paz).— This line cost to December 31, 1913, $6,237,345.. Its length is 126 miles, with no grades of importance. Together with other sections of the road, it has been leased to the Antofagasta & Bolivia Railway for a period of 99 years, from January 1, 1909. (2) Potosi division. — This section, which extends from Rio Mulato (on the Antofagasta & Bolivia Railway) to Potosi, 108 miles, climbs to an altitude of 15,814 feet, the second highest altitude reached by any railway in the world. Potosi is the center of a rich mining section, and a fair amount of traffic origi- nates along the line. The cost of this extension was approximately $8,052,575. "Weekly passenger service is maintained over this division, the trip taking eight hours. The maximum grade along this section is approximately 3 per cent. (3) Ornro-Cochabamba line. — This line, construction on which has been under way for several years, was expected to open for through traffic July 4, 1917. The total length will be about 132 miles, and the cost has exceeded $10,000,000. The railway's present right of way has been subjected to a num- ber of washouts, and maintenance is fairly costly. The city of Cochabamba is, however, of considerable importance and seems destined to grow rapidly in the future. This division crosses the sierra at an altitude of about 14,000 feet and then rapidly descends to Cochabamba, which is located at an altitude of about 8,400 feet. The maximum grade is 3 per cent. (4) Uiiimi-to-Atoehc Palm extension. — This extension was originally pro- jected to Tupiza and has been surveyed to that point. The object of the line was to afford connection with the La Quiaca-Tupiza Railway, under construc- tion by the Vezin Syndicate, of Paris. About $2,600,000 has been expended on this section thus far. The Antofagasta line has evinced no intention of carry- ing out further construction, and efforts are being made to procure funds to carry on the work under Government supervision. The cost of the 60 miles re- SOUTH AMERICA — BOLIVIA. 107 inaining uncompleted has been estimated at $5,000,000. Under present condi- tions it would probably exceed $6,500,000. The Government has offered as collateral for a loan to carry on this construction its £1,000,000 shares in the Bank of the Bolivian Nation. An extension of the Oruro-Viachi line into La Paz is being built by the Antof agasta & Bolivia Railway. This extension is practically completed, although the softness of the soil along the down grade from Alto de La Paz to the city of La Paz has rendered construction difficult. Practically all of the equipment in use on the Bolivia Railway is of American manufacture ; that in use on the Antof agasta & Bo- livia Railway has been mostly made in British shops. ARICA-LA PAZ RAILWAY. The Arica-La Paz Railway extends from the Chilean port of Arica to La Paz, Bolivia, and is the shortest route between the latter city and the coast. The main route from La Paz to Arica is 281 miles, comparing with 534 miles La Paz to Mollendo (Peruvian Corporation route) and 718 miles to Antofagasta (Antofagasta & Bolivia Railway). The highest altitude (13,986 feet) is reached near the Bolivian boundary. A total of 28 miles of rack rail is in use, the'maximum gradient being 6 per cent. There are no tunnels on the Bolivian section although several are found in the Chilean sec- tion. The run from the Chilean-Bolivian boundary to La Paz is 150 miles, including 6 miles of the Guaqui-La Paz Railway from Alto de La Paz to the city. The Arica-La Paz Railway has had to contend with innumerable difficulties during the past two years. Only two locomotives are available for the rack section of the railway and these are not suffi- ciently powerful to propel more than a very limited number of cars. Equipment is otherwise totally inadequate for the amount of busi- ness that the railway is called on to handle, and port facilities at Arica are not of the best, enlarged port works being urgently needed. The Government of Chile allows 40 days for the shipment of goods through Arica to Bolivia. So congested are conditions on the rail- way that this period is frequently exceeded before goods can be de- livered across the border; this has caused a considerable amount of trouble, as on numerous occasions claims have been entered by the Chilean Government for duties on these shipments. An order has been entered in the United States for an additional rack locomotive, which will slightly, improve conditions. Efforts are likewise being made to have the Guaqui-La Paz Railway run cars over the line between Corocoro and Viachi to transport copper mined at the former place. At the present time practically no means are available for handling this copper, owing to lack of equipment on the Arica-La Paz Railway. It has been suggested that the rack rail section of the railway be electrified, and this change is under advisement by the Chilean Government. The property is a good one, and if adequately equipped would probably prove highly profitable. The Bolivian section taps the richest copper belt in the Republic. An extension of the Corocoro branch might readily be carried through to Oruro, probably the best railway-traffic center in the country, as there would be no construction difficulties of any kind. At the present time semiweekly passenger service is maintained be- 108 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. tween Arica and La Paz. Up trains leave Arica Mondays and Fri- days at 4 p. m., making the run in 22 hours. The down trains leave La Paz Sundays and Thursdays at 4.15 p. m., making the down trip in 18J hours. The single first-class fare is 66.40 Chilean pesos (ap- proximately $14 United States gold at present rate of exchange). Sleeping accommodations cost 18.50 pesos ($3.90). GUAQUI-LA PAZ RAILWAY. The Guaqui-La Paz Railway (Peruvian Corporation), which is 60 miles long and which is the only railway at present operating di- rectly into the city of La Paz, reaches its highest altitude at Alto de La Paz, 13,396 feet. The line extends from Guaqui, where connec- tions are afforded with the steamers crossing Lake Titicaca, to La Paz. The Lake Titicaca steamers connect at Puno, Peru, with the Peruvian Southern Railway to Mollendo and Cuzco. Passengers on the up run must spend one night at Arequipa. On Fridays a train runs from Arequipa to Puno, connecting with the express steamer for Guaqui. Forty-seven hours, including the stop-over at Arequipa, are required for the journey. Saturday's train from Mollendo con- nects with the local daylight steamer on Lake Titicaca. On Sundays an express service is operated between La Paz and Mollendo, which enables the down journey to be made in 29 hours. ' During the year ended June 30, 1916, gross earnings of the Guaqui- La Paz Railway totaled £42,470 ($206,680), as compared with £38,867 ($189,145) in 1914-15. Net receipts amounted to £10,152 ($49,400). These figures compare with £87,921 ($427,865) gross in 1912-13 and £38,351 ($186,635) net. Gross earnings in 1910-11 totaled £96,332 ($468,800). There were 109,307 passengers carried during 1915-16. The railway has a privilege zone of 12 miles on either side between the lake and Viachi. The gauge is 1 meter (3.28 feet), and equip- ment is of American make. The maximum gradient on the main steam line is 1.8 per cent and on the electric section 6.2 per cent. The railway property is carried on the books of its owners, the Peru- vian Corporation, at £396,320 ($1,928,700). OTHER RAILWAYS IN OPERATION OR UNDER CONSTRUCTION. There are no other railways of importance at present in operation in Bolivia. A 24-mile line extends from Uyuni, on the Antofogasta & Bolivia Railway, to the Huanchaca silver mines; it is owned by the mining company. There is a 2-mile tunnel on this railway that was extremely difficult to construct. An electric line known as the Cocha- bamba- Vinto-Cliza tramway, controlled in Cochabamba, has been completed for upward of 45 miles, and additional mileage is under construction; its estimated total length is 57 miles. The Macha- camarca & Uncia Railway, owned by Sr. Simon Patino, is under con- struction and partly in operation between Machacamarca (near Oruro, on the Antofagasta & Bolivia Railway) and Uncia, where extremely rich tin mines exist. The railway may be extended to Sucre at some not distant date. Uncia is 52 miles from Macha- camarca. Important railways under active construction are: (1) La Quiaca-Tupiza Railway. — This line, funds for which were largely raised by means of a loan floated in Paris during 1913, and for which a contract was let to the Vezin Syndicte of France, is to form a portion of the through SOUTH AMERICA — BOLIVIA. 109 route between Buenos Aires and La Paz. When this line is completed from La Quiaca, on the Argentine frontier, to Tupiza, there will still remain 60 miles of somewhat difficult line to construct. The cost of linking this gap, as previously stated, was estimated some time ago at $5,000,000. (2) La Paz-Yungas line. — This railway, the funds for which were largely raised by a loan of $2,400,000 furnished by Chandler & Co., of the United States, is under active construction between the city of La Paz and the Yungas province of the Department of La Paz. The line, which will be operated by electricity, will have to surmount some comparatively heavy grades, first at Alto de La Paz and later in reaching the top of the Sierra. It is claimed that a good traffic will be developed, especially in timber, a commodity much needed in La Paz and in other places on the Bolivian plateau. Vegetables are also grown in the Yungas territory, and there is a certain amount of mineral wealth. It is antici- pated that some day the railway will be extended to Rurrenabaque, located near the head of navigation of the Beni River. The population of the Yungas district is mostly composed of Indians, some of whom are living in a compar- atively wild state. The railway; which will be of meter gauge, is being con- structed by the Bolivian Government and is under the supervision of local engineers. Up to the close of 1917 the amount expended on the La Paz-Yungas Railway totaled 3,078,831 bolivianos. In 1917 the expenditures totaled 1,467,899 bolivianos. The rails have been carried over the Cordillera and early in 1918 were approaching Unduavi. (3) Potosi-Sucre Railway. — Construction work under governmental super- vision was commenced on this line in November, 1916. The railway, which will connect with the Bolivia Railway at Potosi, will, if completed, be the first line to reach the nominal capital of the Republic. It is expected that the line will be completed as far as Betanzo in about 18 months. In order to carry on the fur- ther construction of the line to Sucre a loan of $4,000,000 to $5,000,000 will prob- ably be negotiated, the rate suggested being 6 per cent interest with 2 per cent annual amortization. Various taxes will, it is stated, be assigned for the serv- ice of this loan, including those on pepper, hides, and cattle. In addition, the Departments of Chuquisaca and Potosi have each agreed to provide 50,000 bo- livianos ($19,465) for the loan service. In the event of the completion of the line to Sucre it is hoped that it will be possible to continue the road northeast- ward to Santa Cruz (population 20,000), center of the rich Santa Cruz De- partment PROJECTS UNDER CONSIDERATION. Negotiations have been entered into at various times for the further extension of the Potosi-Sucre Eailway to Puerto Suarez, on the Para- guay River. The concession at latest accounts was controlled by an Italian syndicate, the Fomento de Oriente Boliviano. The length of the line, which has been partly surveyed, will be between 425 and 450 miles, and its cost would probably slightly exceed $10,000,000. The Bolivian Government has agreed to guarantee a certain percent- age on a portion of the construction cost. Puerto Suarez, which is the outlet for fair amounts of rubber and hides, is located opposite Corumba, Brazil, to which port the Brazilian Government has under construction a line of railway. In the event of the possible construc- tion of these two lines and of the completion of the Bolivian Gov- ernment lines, Santa Cruz to Sucre and Sucre to Potosi, a through transcontinental route, somewhat lengthy, would be open for such traffic as might develop. The rail distance to Rio de Janeiro would be approximately 1,900 miles. A number of years will probably elapse before these various undertakings will be fully carried out. Another project is for the construction of a line from Yacunda, on the Argentine frontier — between which point and the town of Embarcacion the Argentine Government is constructing a railway- northward to Santa Cruz, tapping the oil country as well as other important, although little developed; sections of the country. This line would approximate 250 miles in length and would encounter 110 INVESTMENTS IN LATIN AMERICA AND BBITSSH WEST INDIES. some difficult grades. Concessions have been granted by the Govern- ment for the line's construction, and much of the route has been surveyed. Years will probably pass before it will be constructed. A line has been surveyed from La Quiaca, on the Argentine frontier (terminus of its Government line), to Tarija, Bolivia, which is a town of some importance and the center of an agricultural area of great fertility. The length of this line would probably not exceed 125 miles. The Bolivian section of the Madeira-Mamore Railway, constructed in part as a means of routing traffic around the falls and rapids in the Madeira and Mamore Rivers, will probably not be built at the present time, owing to the receivership of the railway company. Its terminus in Bolivia was to have been at Riberalta, on the Rio Madre de Dios. PUBLIC UTILITIES. Public-utility development in Bolivia has been confined mainly to the larger cities. Electric lighting has been installed in perhaps a dozen of the more important places, and water systems have likewise been established in various localities. In addition to the interurban electric railway terminating at Cochabamba, there is one other tram- way line in the Republic — namely, that operated by the Bolivian & General Enterprise Co. (Ltd.) at La Paz. The Bolivian & General Enterprise Co. controls and operates the tramways, electric-lighting system, and telephone service at La Paz. The company, which is owned almost wholly by the French munition- making firm of Creusot & Schneider, was originally incorporated for the purpose of exploiting and developing rubber in far eastern Bo- livia. Following the collapse of the rubber boom this concern ob- tained the public-utility franchises in La Paz. Power is obtained without difficulty from the river that flows down from the Alto. The tramway line, single track with sidings for passing purposes, runs from the railway station on the outskirts of the city to the main plaza, thence down the heavy grade to the Parado or residential sec- tion. The line is approximately 3 miles in length, and 8 cars, all of American manufacture, are in regular use. The local first-class fare is high, 0.20 boliviano (8 cents), and the second-class rate is 0.10 boliviano (4 cents). The cars do not seem to be heavily patronized. The cost for electric service, especially for cooking, is said to be ex- cessive, and as a result electricity is used for practically no other purposes than lighting. The telephone service is good and fairly reasonable. Xo statement of earnings and profits is made public, but it is understood that dividends are not paid on the present capitalization. The previously mentioned interurban line terminating at Coelfa- bamba is operated by the Electric Light & Power Co. (Sociedad de Luz y Fuerza Electrica), of Cochabamba. This light railway, which also radiates through the city, is of 2^-foot gauge, and operates to the towns of Arami, Vinto, Puneta, Tarata, and Cliza. The company also furnishes light and power to Cochabamba and these other towns, and operates a flour mill at Cochabamba. The company has out- standing £300,000 per cent preferred stock, guaranteed for 25 years by the Government of Bolivia, and £100,000 common stock. SOUTH AMERICA — BOLIVIA. Ill At Sucre, the nominal capital, the light and power franchise is held by the Empresa de Luz y Fuerza Electrica. This company is owned, practically in its entirety, by an individual. At Oruro a local company, the Empresa de Luz y Fuerza Electrica, has the lighting and power privileges. The lighting facilities are used by the munici- pality and to a limited extent by the general public. Oruro was the second city in Bolivia to install electricity. A mule tramway has long existed in the city, but it is seldom, if ever, used to-day. The telephone system is controlled by an individual firm, Pena & Co. The city of Tarija is lighted by gas and electricity and obtains a supply of good water from Erquis, 6 miles away. Potosi is electric lighted and receives its water supply from 22 of 32 original reser- voirs built by the Spaniards in the sixteenth century on the hills above the city. Other than the above, there has been little development along these lines. Opportunities are said to exist for a holding company to take over and develop the existing properties in Bolivia and, as time goes on, to acquire additional franchises. THE RUBBER INDUSTRY. Several years ago it was thought that rubber was destined to be the principal product of Bolivia. The districts adjacent to the Beni and Madre de Dios Rivers were rightly heralded as being Eldorados for the growth and exploitation of this product. Large sums were invested in the field and anticipations of large profits were generally indulged in. The industry was hindered from the start by the scar- city of labor and the somewhat unhealthf ul condition of the country, as well as by the general lack of transportation facilities. The com- pletion of the Brazilian section of the Madeira-Mamore Railway aided the producers, and much was anticipated from the Bolivian section of the railway, which, it was contemplated, would be built to Riberalta, from which point steamers were to have been run on the navigable rivers of eastern Bolivia. The railway was not completed, however, owing to the receivership of the company, and this fact, combined with the crash in the price of rubber, placed the industry generally in an unfavorable situation. Conditions were made even worse following the declaration of war in Europe. An improvement is being noticed at the present time, and better things may be ex- pected. Some years will probably elapse before prosperity is fully restored. MINING ENTERPRISES. Foremost among the industries of Bolivia is mining. The silver hills at Potosi and Oruro furnished vast portions of the hoards of wealth that the galleons of Spain took across the seas. Gold and silver were the only minerals sought in those days, except perhaps a little copper. Fabulous tales have been told of the amounts of ore extracted from the mountain at Potosi during the days of Spanish occupancy. Sufficient forced labor was obtainable to assure the tak- ing out of this ore almost without cost, and vast fortunes were accum- ulated by many of the conquistadores. After the independence of Bolivia had been achieved the mining industry gradually fell into a state of decay, from which it did not 112 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. fully emerge until a few years ago. The land was strewn with thou- sands of abandoned mines and workings, and such development as was carried on was handled in a haphazard way. The construction of railways into the Republic and the endeavors of a thoroughly en- lightened Government gradually put the industry on a firm founda- tion, and there is every prospect of continued progress. Silver has been displaced by tin as the most important mineral product. A total of 36,482 tons of this valuable mineral was exported in 1915, mostly through the port of Antofagasta ; 35,360 tons went to Great Britain and 1,100 tons to the United States. The amount exported in 1915 compares with 35,834 tons exported in 1912 and 35,566 tons in 1909. The Republic stands second in the world in the production of tin, and there are prospects of much greater develop- ment following the introduction of somewhat more modern methods and the construction of additional railways and roads. A number of the tin properties are paying well, and there is certainly room for the establishment of other companies, moderately capitalized and man- aged on a conservative scale. High costs of fuel and transportation are the drawbacks in this as well as other mineral industries in Bo- livia. Labor is cheap, good, and fairly plentiful. The better grade of this tin seems to exist in altitudes above 14,500 feet, where working conditions are not so pleasant as on the pampa. Sr. Simon Patiiio is the owner of many of the most important of these mines. Details concerning several of the tin mines of Bolivia, their capitalization, etc., will be found in the Appendix (see p. 500). Probably the most important of Sr. Patifio's tin mines are the Uncia properties at Uncia, to which place a railway is under construction, and the La Salvadora mine in the Department of Potosi. The Aramayo Francke proper- ties, hereinafter described, are also of considerable importance. „ Some American capital has recently been invested in the tin fields, the re- mainder of the mines being largely held by Bolivian, Chilean, French, British, and Swiss interests. Shares of several of the mining com- panies are listed on the Santiago (Chile) Stock Exchange. The tin production of Bolivia during the years 1910 to 1915 has been as follows : Years. 1910 1911 1912 Metric tons.i 38,548 37,073 38,614 Value. $14,399,415 20,482,335 23,438,985 Years. 1913 1914 1915 Metric tons. 1 44,595 37,260 39,312 Value. $25,375,245 16,529,120 19,268,860 1 Metric ton= 2,205 pounds. Copper, largely found in the Corocoro district, was produced in the year 1915 to the amount of 23,820 tons, the largest production in the history of the Republic. The exportation of this commodity in 1916 was considerably handicapped, owing to the lack of equipment in service on the Arica-La Paz Railway, which was utterly unabk to handle this traffic. The Corocoro district has been known for many years, and has been regularly worked since 1873. In 19.09 a large number of the properties were consolidated as the Corocoro United Copper Mines (Ltd.), organized in Great Britain. The rest of the properties are held mostly by the Compania Corocoro de SOUTH AMERICA — BOLIVIA. 113 Bolivia, organized in 1873. A short time ago the Andes Copper Co., a subsidiary of the Anaconda Copper Co. (capital, $2,000,000), in- vestigated certain of the developed properties at Corocoro. The offering price, said to be £1,200,000, was considered too high, and the American concern abandoned the field for the time being to investigate certain properties located near Arequipa, Peru. Copper formations in the Corocoro district are said to resemble greatly those of the northern Michigan copper mines, such as Calumet & Hecla, Copper Range, and other well-known properties. Most of the cop- per exported from Bolivia in 1915 went to the United States. The total value of the copper produced in 1915 was $3,820,821, as com- pared with $1,728,441 in 1914, $1,278,870 in 1913, $1,318,745 in 1912, $555,230 in 1911,_ $695,312 in 1910, and approximately $500,000 in 1901. The principal fuel used at the mines is taquia, which sells ordinarily at about $4 per ton, but which, owing to the abnormal demand, has risen to about $7. The daily wages paid to native em- ployees is approximately 1.80 bolivianos to the men and 0.70 bolivi- anos to the women. The tungsten deposits of Bolivia have attracted considerable at- tention of. late. About 793 tons of this valuable mineral were ex- ported in 1915, as compared with 276 tons in 1914. The United States is the best customer for this commodity. The ore is found in widely scattered areas, although most of the development has taken place in the Santa Cruz district, lying to the northwest of Cocha- bamba. There is likewise some development in the neighborhood of Uyuni. The stated production for 1915 was valued at $293,462. Antimony was exported to the amount of 17,923 tons in 1915 and in very large amounts during 1916. Only 186 tons were exported during 1914. The value of the 1915 production, given as 13,085 metric tons (less than the amount exported), was $4,216,059, as compared with only $11,913 in 1914. The business in this commodity may be said to be only temporary, the ruling high prices being due to the abnormal demand caused by the European war. In normal times exportation is hindered by the high transportation rates. Silver, as has been stated previously, has been declining in produc- tion in the Eepublic of Bolivia. The recent rise in the price of the commodity has brought a slight, temporary increase in the value of the production. During the days before the formation of the Re- public, Bolivia was the richest silver country in the world. The famous Cerro Rico de Potosi produced in bygone days more than $2,000,000,000 in wealth — the greatest production of any similar area in the entire world. It is further claimed that the mineral riches of this silver mountain are far from exhausted. From 1900 to 1910 the silver production of Bolivia dropped steadily, from upward of $5,000,000 per annum to approximately $2,100,000, and from 1910 to 1915 the production declined about one-half, the total for 1915 . reaching $1,092,647. Gold mining has not assumed importance in Bolivia. The Depart- ment of La Paz at the present time produces most of the gold mined in Bolivia, although it is known to exist in the Departments of Potosi, Chuquisaca, Cochabamba, and'in the Velasco province of the Department of Santa Cruz. In all, 398 pounds were exported during 1915 and 393 pounds during 1914. The value of the 1914 production was $118,695. 63018°— 18 8 114 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Lead is produced in rather small quantities, 2,208 tons having been exported during 1915 via La Quiaca and the railways of Argentina. Shipments for 1914 were 1,555 tons, valued at $60,489. High trans- portation costs prevent the development of this branch of mining. Zinc is produced in small amounts, and recently an investigation was carried on by the leading zinc producer of the United States as to the advisability of entering the Bolivian field-. Results were said to have been unsatisfactory. Only 104 tons of zinc were exported in 1915,- as compared with 3,755 tons in 1914. The production for 1914 was valued at approximately $55,000. In 1911 the production was valued at approximately $170,000. Bismuth is also produced in Bolivia, the nation leading the world in the amount annually taken from the earth. The lack of demand for this commodity greatly restricts the sale. During 1915 663 tons were exported, and 568 tons, valued at $1,071,125, produced. Practically the only other minerals produced were molybdenum (of which slightly more than 6 tons was exported) and wolfram. The total value of the mineral production of Bolivia during several recent years has been as follows: 1910, $18,236,542; 1911, $23,948,862; 1912, $27,689,685; 1913, $30,964,855; 1914, $20,579,613; 1915, $29,- 762,966. The Bolivian Government has recently granted a concession for the erection of a cement plant at the port of Carabuco on the shores of Lake Titicaca. Geological surveys of the near-by hills indicate the practicability of the undertaking. A ready market for the product will be found in Bolivia and in the uplands of Peru. The Peruvian Corporation's local steamers make the port of Carabuco regularly and connect with the Peruvian Southern Railway at Puno, Peru, and with the Guaqui-La Paz Railway at G.uaqui, Bolivia. Coal is found in fair quantities near Carabuco, the strata covering the hills over an area of more than 4 miles. Some years ago an American company secured a concession to work these mines and invested considerable capital in the enterprise. Several hundred tons were mined, and the coal was experimented with by the Peruvian Corporation in its steamers — with disastrous results, however, it being found that the coal was intermixed with large quantities of sulphur and other impurities. As coal sells at $60 and upward per ton in Bolivia, the operation of this mine would probably prove profitable, if means could be found to make the product fit for use. A further difficulty is the soft nature of the soil, which would make necessary extensive timbering. The cost of this timber would prove a severe drawback, as the price in Bolivia is virtually prohibitive. However, stone adits might be used as a substitute. PETROLEUM RESOURCES. Numerous traces of oil have been found in Bolivia, and hopes are entertained that from these petroleum discoveries will come the solution of the fuel problems of the Republic. Frederick G. Clapp. S. G.. in his paper, "Petroleum Resources of South America." gives an extensive review of the oil situation in Bolivia. This is here re- produced in part: SOUTH AMERICA BOLIVIA. 115 DISTRIBUTION OF BOLIVIA FIELDS. The petroliferous fields of Bolivia, situated in the Andean district, lie along the southeastern frontier of the country, and indications are quite continuous 62 Thereza-Christina 81 Braganca (State) <>196 Nazareth Railway _ "140 Santo Amaro . « 27 Victoria-Minis Railway « 373 Goyaz Railway « 280 Tocan tins-Araguaya 35 Total °13. 341 • Approximate mileage. 164 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. Although, as indicated above, railway progress in Brazil has been substantial, much additional development will probably follow the conclusion of the war in Europe. PUBLIC UTILITIES. BRAZILIAN TRACTION, LIGHT & POWER CO. The largest and most important public-utility company in Brazil is the Brazilian Traction, Light & Power Co. (Ltd.), a Canadian corporation, registered in 1912 as a consolidation of the Rio de Janeiro Tramway, Light & Power Co. (Ltd.) ,• the Sao Paulo Tram- way, Light & Power Co. (Ltd.), and the Sao Paulo Electric Co. The parent company at the time of consolidation assumed all the debts, guaranties, and other responsibilities of the companies acquired. The direct capitalization of the Brazilian Traction, Light & Power Co. consists of: (1) $7,500,000 three-year secured notes, due Novem- ber 1, 1919, behind which is deposited, as collateral, $15,004,450 bonds of underlying companies (interest payable May and Novem- ber) ; (2) $10,000,000 cumulative 6 per cent preference shares, on which full dividend payments are being made; and (3) $106,417,800 ordinary shares. Dividend payments on the ordinary shares have heen as follows: 1912, 1^ per cent; 1918 and 1914, 6 per cent; 1915 and 1916, 4 per cent ; in March, 1917, 1 per cent was paid (quarterly Tate) ; in June, 1917, the dividend was passed. Income accounts of the company during recent years, have shown the following results: Items. Revenues from securities owned and from other sources. Surplus applicable for dividends Preferred dividends (6 per cent) Ordinary dividends ■ 88,058,813 7,686,532 600.000 6,257lU9 $5,612,876 5,394,802 600,000 4,249,380 96,019,473 5,674,642 600,000 4,251,488 Under the plan of consolidation effected in 1912 stocks of the old companies were exchanged for ordinary shares of the holding com- pany as follows : Companies Rio de Janeiro Tramway, Light & Power Co 8&o Paulo Tramway, Light & Power Co Sao Paulo Electric Co Old com- panies' stocks. $45,000,000 10,000,000 5,000,000 New stock issued in $72,000,000 27,500,000 5,000,000 BIO DE JANETBO TRAMWAY, LIGHT & POWEB CO. (LTD.)! The Bio de Janeiro Tramway, Light & Power Co. (Ltd.), which is controlled by the Brazilian company, as previously mentioned, through ownership by the latter of approximately 449,304 of the 450,- 000 outstanding shares, is in turn virtually a holding company. It owns the whole or a large part of the stocks of some 14 companies SOUTH AMERICA — BRAZIL. 165 operating traction lines, gas, electric-lighting, and power systems, telephone lines, etc. The traction lines handle both urban and inter- urban traffic and have an approximate mileage of 237, all electrically operated: The car mileage for 1916 was 24,667,154 and the total num- ber of passengers carried was 198,677,975. A total of 1,183 cars of va- rious kinds were in service, as of December 31. 1916; also 836,269 in- candescent lamps (419,413 in 1912), 10,860 arc lamps (9,084 in 1912), and 31,551 telephones. Light and power consumers numbered 50,210. In addition to the $45,000,000 stock, on which 5 per cent per annum is paid, the Rio de Janeiro company had outstanding, in 1916, $50,- 627,867 bonds, including $25,000,000 first gold 5's due 1935, as well as £5,266,000 fifty-year mortgage 5's due 1958, interest April and Octo- ber. These bonds are listed on the stock exchanges, of Toronto, Montreal, London, and Brussels. The Jardim Botanico Tramways, about 80 per cent of the £1,400,000 stock of which is owned by the Rio de Janeiro company, has out- standing an issue of £1,400,000 first sterling 5 per cent bonds, guaran- teed by the parent company. These bonds are due in 1951, and in- terest is payable January and July. They were quoted 79 to 82 in January, 1918. The gas and electric franchises of the company expire in 1945; telephone franchises expire partly in 1928, although some of the fran- chises are perpetual ; tramway franchises extend until 1970. SAO PATJLO TRAMWAY, LIGHT & POWEK CO. The Sao Paulo Tramway, Light & Power Co. was incorporated in 1899 to acquire important tramway and lighting systems in and near the city of Sao Paulo. Of the outstanding 100,000 shares of stock of this company, 99,814 are held by the Brazilian Traction, Light & Power Co. Dividends on these shares have usually been at the rate of 10 per cent per annum. The funded debt of this company amounts to approximately $10,000,000, this including £821,917 perpetual con- solidated debenture stock and $6,000,000 first gold 5 per cent bonds due 1929, listed in London, England, and Toronto, Canada. An addi- tional issue of £1,000,000 general bonds due 1963 has been authorized, and £514,000 are deposited as part collateral for the notes of the Bra- zilian Traction, Light & Power Co. The company operates approxi- mately 141 miles of electric traction lines, and owns 359 passenger and 92 freight cars. A total of 55,154,564 passengers were carried in 1916, the car mileage being 10,153,657. As of December 31, 1916, there were 30,251 consumers of light and power. Incandescent lights in use totaled 332,392, as compared with 124,004 in 1912. SJlO PAULO ELECTRIC CO. The Sao Paulo Electric Co., the entire 50,000 shares ($5,000,000) of which are held by the Brazilian Traction, Light & Power Co., has a bonded debt of £2,000.000 first gold 5's due 1962, interest payable January and July, which are listed on the London Stock Exchange. This company owns an important and extensive hydroelectric prop- erty, having a contract to furnish the Sao Paulo Traction, Light & Power Co. with 15,000 horsepower and to supply electric lighting 166 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. and power to certain towns and cities in the State of Sao Paulo. Three and one-half miles of tramway are also operated and nine cars owned. Separate statements of earnings of the Rio de Janeiro Traction, - Light & Power Co. (Ltd.), the Sao Paulo Traction, Light & Power Co. (Ltd.), and the Sao Paulo Electric Co. are not made public. OTHEE ENTERPRISES CONTROLLED BY BRAZILIAN TRACTION, LIGHT & POWER CO. In addition to its holdings of shares in the companies heretofore described, the Brazilian Traction, Light & Power Co. owned, through a subsidiary, approximately 95 per cent of the shares of the Com- panhia Telephonica do Estado de Sao Paulo and the Companhia Rede Telephonica Bragantina. A new company known as the Rede Rio de Janeiro & Sao Paulo Telephone Co., the $5,000,000 stock of which is owned by the Brazilian company, is the subsidiary hold- ing the above-mentioned shares, as well as ( the shares of two other telephone companies in the territory served. A telephone line, 300 miles in length, extending from Rio de Janeiro to Sao Paulo, was under construction in 1917 and has presumably been completed. INCREASED RECEIPTS — PRICES OF SECURITIES. In November, 1917, it was estimated that the gross receipts of the Brazilian Traction, Light & Power Co. for the calendar year 1917 would be approximately 8,000,000 milreis in excess of 1916, and that operating income totals would increase 2,500,000 to 3,000,000 milreis. Securities of the parent and subsidiary companies have been quoted as follows: Securities. • High price since 1911. Price January, 1918. Brazil Tramway, Light & Power Co.: 94 102J 99 107i 108 111 97 87 Rio de Janeiro Traction, Light & Power Co. first 5 per cent bonds 86 Sfto Paulo Tramway, Light & Power Co.: 87 76 RIO DE JANEIRO CITY IMPROVEMENT CO. The drainage concessions for the city of Rio de Janeiro are held by the Rio de Janeiro City Improvement Co., a British company, incorporated 1862. These concessions expire in 1947 and the prop- erties revert to the city without compensation. The company re- ceives 60 milreis (at an exchange rate of 19d.) per annum for each house drained. The subscribed capital of the company is £1,192,775 in shares of £5 and approximately £537,100 5 per cent debentures maturing in annual installments. Dividends for 1905 to 1913, in- clusive, were at the rate of 5 per cent per annum; in 1914, 2-J per cent was paid, and in 1915, 1\ per cent. The company's debentures were quoted in 1918 (January) at 84|, as compared with 103, the high price since 1911. The ordinary stock was quoted in January, 1918, at SOUTH AMERICA— BRAZIL. 167 approximately 3£ (69s. per £5 share), this comparing with 4f, the high price since 1911. 1 TRAMWAYS AND ELECTRIC PLANT IN CURITIBA. The South Brazilian Railways Co. (Ltd.) owns tramways and electric-lighting plant in the city of Curitiba (population 50,000), State of Parana. The tramway lines are slightly more than 16 miles in length. A power house is owned. This is a French company, registered in 1910. The State of Parana may purchase the tramway system under certain conditions favorable to the stockholders. The capitalization of the company consists of £300,000 shares of £4 par (100 francs) ; also £289,160 5 per cent debentures, first series, interest April and October, maturity 1968, secured by a first charge on the tramway undertaking, together with £372,800 5 per cent debentures, second series, due 1968, secured by a first charge on the electric-light- ing and power undertakings. There were also outstanding in 1914 certain loans, and the company met with some difficulties, owing to the war, in arranging to meet its financial requirements. Receipts for 1915 were 1,161,407 milreis. WATER SERVICE AND DRAINAGE SYSTEM OF SAO PAULO. The water service and the drainage system of the city of Sao Paulo were originally held by the Cantareira Water Supply and Drainage Co., of Sao Paulo. This company was established in 1878 and in 1888 floated an issue of £350,000 5 per cent debenture bonds in Lon- don, approximately £87,000 of which remain outstanding, the rest having been redeemed through sinking-fund operations. The prop- erty was acquired in 1892 by the State of Sao Paulo, the State assum- ing responsibility for the principal and interest. CITY OF SANTOS IMPROVEMENT CO. The water, gas, electric, and tramway franchises for the city of Santos are held by the City of Santos Improvement Co., a British company, registered in 1880. The franchises vary in length, the ex- clusive gas franchise expiring in 1920, water in 1930, electric lighting in 1924, the works remaining the property of the company in per- petuity. The tramway lines are 38 miles in length, of which 28J miles are under perpetual franchises and the remainder, under fran- chises expiring in 1923 and 1938. The capitalization of the com- pany consists of £800.000 ordinary stock, £200,000 6 per cent cumu- lative preference stock, and two debenture issues, the first debentures being outstanding to the amount of £125,500 (original issue £200,000) and tramway debentures to the amount of £175,200. Dividends on the ordinary stock have varied from 3 per cent to 7£ per cent per annum, being 6 per cent in 1917 (see Appendix, p. 504). The ordi- nary shares (£10 par) were quoted at 6 in January, 1918, this com- paring with 13f , the high price since 1911. The preference shares (£10) were quoted at 1\ in January, 1918, and the two debenture issues at 88 and 89, respectively. PUBLIC-UTILITY COMPANIES IN CEARA. The Ceara Gas Co. (Ltd.), a British corporation, owns extensive gas works in the city of Ceara, its concession extending until 1958. >For 1917 the net profits totaled £84,632; the amount brought forward, was £19,032, makin^ £103,664 surplus, of which £25,000 was transferred to reserve. The dividend for the year was 5 per cent (less tax) on the £1,192,775 shares. 168 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The company has outstanding £10,000 10 per cent first preference shares (par £10) ; £9,420 10 per cent second preference shares (par £10) ; also £30,000 fully paid (£10) ordinary shares and £4,266 in ordinary shares, £8 paid. There are also outstanding £25,000 6 per cent debentures, interest payable January and July and principal payable 1927. Full dividends have been regularly paid on the pref- erence shares. The payments on the ordinary shares during, recent years have been at the following rates : 1907-8 and 1908-9, 8 per cent each; 1909-10 and 1910-11, 9 per cent each; 1911-12 and 1912-13, 10 per cent each; 1913-14, 6 per cent; 1914-15 and 1915-16, none. The company had a reserve account of £24,000 in 1916, and carried forward to the 1917 fiscal year £3,329. The London office of the com- pany is at 9 Queen Street Place, E. C. The Ceara Tramways, Light & Power Co. (Ltd.) was incorporated in 1911 to take over a 10-mile mule tramway system, receiving a con- cession from the municipality of Ceara for 76 years from 1911, to electrify the existing system and to extend the line about 4 miles, as well as to establish and work an electric lighting and power plant. At the end of the concession the properties revert to the municipality without remuneration. The authorized capitalization is £400,000, one-half to be ordinary stock and one-half 7 per cent preference stock. At the close of 1916, £91,428 ordinary stock was outstand- ing, none of the preference stock having been issued. Approxi- mately £320,000 5 per cent first debenture stock (authorized £400,- 000) has been issued, of which £250,000 was offered in 1912 by Parr's Bank, at 92J, with a 10 per cent ordinary stock bonus. The sur- plus of receipts over expenditures for 1915 totaled 243,323 milreis. Owing to the war and the drop in exchange, the sinking fund of 1 per cent was suspended temporarily and there was a slight adjust- ment of interest payments. The property has now been practically completed and, with the exception of a small tramway extension, has been placed in full operation. PERNAMBUCO TRAMWAYS & POWER CO. The Pernambuco Tramways & Power Co. (British) operates the tramways, gas works, and electric-lighting plant in the city of Re- cife (Pernambuco). This company has acquired the shares of sev- eral utility companies, including the Brazilian Street Railway (Ltd.). Capitalization consists of : £400,000 6 per cent cumulative preference shares (par £1; quoted 12s. January, 1918) ; £816,030 ordinary shares (par £1; quoted 6s. 6d. January, 1918) ; £1,022,900 5 per cent deben- tures, principal payable 1953 at par, by means of sinking fund, and interest payable January and July (quoted 66J per cent January. 1918) ; also a loan of £84,840 secured by debentures. Interest has been regularly met on outstanding obligations and a surplus earned. The balance carried forward to the 1916 account amounted to £14,770 ; later information is not available. The total length of tramways in operation is approximately 78 kilometers (48 miles). In 1917 a dividend of Si per cent was paid on the preference stock. The Brazilian Street Railway Co., the securities of which have been mostly acquired by the Pernambuco Tramways & Power Co., is capitalized as follows: £32,537 5 per cent cumulative preference shares, par £1 ; £87,000 ordinary shares, par £1 ; and £45,950 5 per cent SOUTH AMERICA BRAZIL. 169 debentures. The preference dividend was paid in full until .1914, and a small rate was annually maintained on the ordinary shares until that date. A very large proportion of the security holders have exchanged their stocks and debentures, as stated above. PUBLIC-UTILITY COMPANIES IN MANAOS. The Manaos Tramways & Light Co. (Ltd.) furnishes the light and power to the city of Manaos and operates about 23 miles of tram- way lines (electric). A description of the company will be found in the Appendix (p. 507). The concession extends for 60 years from 1908, at the end of which time the property reverts to the State of Amazonas without payment. There are outstanding £300,000 shares iof £1 and £300,000 first-charge debentures. Interest has been met on the debentures, and on the stock 3 per cent was paid in 1911-12 and 4 per cent in 1912-13. No subsequent dividends had been paid to the close of 1916. In January, 1918, the £1 stock was quoted at 4s. and the debentures at 68. The waterworks and sewerage plant of the city of Manaos were constructed by the Manaos Improvements Co. Its concession, which was for 60 years from 1906, has been the subject of continuous liti- gation and contention. The company has outstanding £44,800 prior- lien bonds, £500,000 6 per cent first debentures, and £150,000 second debentures (held by bankers), also £200,000 7 per cent cumulative preference stock and £200,000 ordinary stock. The preference stock has not received dividends since 1908, these dividends remaining due and unpaid. The debenture holders have agreed to defer receiving interest until six months after the conclusion of the European war. The preference shares of £10 par were quoted in 1914 at £3 10s. ; no later quotation is 'available. The 6 per cent debentures were quoted at 55 in 1914. PARA PUBLIC WORKS CO.— PARA ELECTRIC RAILWAYS & LIGHTING CO. The Para Public Works Co. (see Appendix) holds the telephone concession in the city of Belem (Para) and formerly held the public- cleaning contract. The latter was canceled in 1912 upon payment by the city of £275,200 municipal bonds. There is £60,000 ordinary stock and £2,000 deferred stock outstanding. The net profit for 1917 was £7,456, and, including the amount brought forward, the avail- able surplus was £9,785. A dividend of 8 per cent was paid on the £60,000 ordinary shares. The Para Electric Railways & Lighting Co. (Ltd.), a British com- pany registered in 1905, operates the tramways and electric lighting system of the city of Belem (Para) and, through control of the Para Gas Co., the gas lighting. The tramways are operated by electricity and are 34| miles in length. The outstanding capital consists of £325,000 6 per cent cumulative preference stock (par £5), £390,000 ordinary stock (par £5), and £668,400 5 per cent first debenture stock (original issue £700,000), interest payable June and December 1 and principal repayable through a cumulative sinking fund of \ per cent per annum. Full dividends have regularly been paid on the pref- erence stock, and during the years 1909-10 to 1912-13, inclusive, 10 per cent was annually paid on the ordinary stock. In 1913-14 the rate was 6 per cent, and in the two subsequent years the rate was 5 per cent per annum. 170 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The securities of this company, during recent years, have been quoted as follows : High Price Securities. price January, 1918. First debentures 1031 75 6 per cent cumulative preference 1 5| 4J Ordinary shares ' 8 4 ' Par £5. The concession of the company is for 99 years from December, 1905, at the end of which period the property is to pass into the pos- session of the municipality without compensation. At the close of 1915, the company held reserves for contingencies to the amount of £50,522, reserves for depreciation and renewals of £96,545, and carried forward to 1916 the sum of £18,935. Preference shares receive their dividends semiannually, March and September. SAO PAULO GAS CO. The Sao Paulo Gas Co., an Anglo-Canadian enterprise, controls the gas works and system operating in the city of Sao Paulo. The com- pany's concession expires in 1950, the works, however, remaining the property of the company after that period with the privilege of continuing business under the common law. The authorized capi- talization is £500,000, of which £425,000 is now outstanding, consisting of £150,000 6 per cent cumulative preference shares, par £10, and £275,000 ordinary shares of £5 each. Full preference dividends have regularly been paid for many years, and the ordinary shares from 1905 to 1908, inclusive, received 8 per cent per annum; in 1909 and 1910, 9 per cent each; 1911, 12 per cent; 1913, 6 per cent; and in later vears 6| per cent per annum. The preference shares sold at £8 in January, 1918, as compared with the high price since 1911 of 12J. In addition to the share capital, this company had outstanding, in 1917, £125,000 5 per cent debentures due 1928, the company having the power to redeem them at par on six months' notice. Interest on these debentures is payable January and July 1. These debentures, which are issued in £50 denominations, were quoted January, 1918, at 42, this comparing with the high price since 1911 of 51. The gen- eral reserve fund of the company in 1915 amounted to £125,000. This company is an old one, its incorporation dating from the year 1869. BAHIA TRAMWAYS, LIGHT & POWER CO. A British company known as the Bahia Tramways, Light & Power Co. formerly held the tramway and lighting contract for the city of Bahia. In 1913, under an agreement, the property was sold to the city, the company receiving bonds of the municipality. Subsequently the interest and sinking-fund payments on the municipal bonds went into default. The capitalization of the former company consisted of $7,386,300 5 per cent first-mortgage debentures and $3,500,000 stock. It is hoped that some portion of the debentures will be re- paid, but the stock will probably be valueless. SOUTH AMEKICA BRAZIL. 171 MINAS GERAES ELECTRIC LIGHT & TRAMWAYS CO. The tramway, electric light and power, and telephone service of the city of Bello Horizonte is furnished by the Minas Geraes Electric Light & Tramways Co. (Companhia de Electricidade e Viacao Ur- bana de Minas Geraes), a local company incorporated in 1912. The franchise held by the company is for 53 years and covers also terri- tory suburban to the city. The rental paid by the company to the State of Minas Geraes for the exclusive public-utility privilege of the district is £17,000, minimum. The capitalization of the company is equivalent to $500,000 shares and the outstanding balance of £120,- 000 5 per cent first-mortgage bonds, par £20 to £100, issued in Great Britain, these being guaranteed as to principal and interest by the State of Minas Geraes (interest payable April and October and principal due finally in 1953 through 1 per cent annual cumulative sinking fund). The original offering price for these bonds was 90J (1913). Dividends on the stock of the company for 1913, 1914, and 1915 were 84 per cent, 10 per cent, and 12 per cent, respectively. In 1915 the company's reserve fund amounted to 49,672 milreis. TRAMWAY SYSTEM IN NICTHEROY. The tramway system of the city of Nictheroy, capital of the State of Rio de Janeiro, is owned by the Companhia Cantareira e Viacao Fluminense, which also operates a line of ferry boats running between Nictheroy and Rio de Janeiro. A total of 45,599 of the 50,000 shares (par 200 milreis) of the company are owned by the Leopold- ina Terminal Co. (Ltd.), a British company (see p. 147). The tram- way system is 72 kilometers (45 miles) in length. PUBLIC UTILITIES IN RIO GRANDE DO SUL. The tramway, electric light, and power business of Rio Grande do Sul is controlled by the Port of Rio Grande do Sul Co., which was an undertaking of the Brazil Railway (see p. 151). The public utilities are expected to develop profitably. OTHER COMPANIES. Among the important local companies yet unmentioned are the following : (a) Companhia Telephonica do Parana, furnishing telephone service for a considerable section of the State of Parana. This com- pany is capitalized at 1,200,000 milreis shares and 1,000,000 milreis 7 per cent debentures due 1938. These debentures were originally issued at 90. (i) Campineira de Traccao, Luz e Forca, of Campinas (Campinas Traction, Light & Power Co.), which operates the public utilities in the important city of Campinas, State of Sao Paulo. This city has a population of more than 50,000 and is the center of an important coffee-producing district. The company has a capitalization of 4,000.000 milreis shares (200 milreis par), together with an issue of 4,000.000 milreis 7 per cent debentures, of which 3,725,000 deben- tures were in circulation as of the year 1916. Interest on these debentures is payable January and July 25, their final maturity date 172 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. is 1940, and their original offering price was 93. The quotation in 1916 was 90. Campinas is located on the Paulista Eailway, about 65 miles from Sao Paulo. In addition to the cities previously mentioned as having public utilities, there are numerous cities, towns, and villages provided with lighting and water facilities. Not a few cities have tramway sys- tems, among those not already mentioned being Aracaju, State of Sergipe (population 35,000) ; Campos, State of Rio de Janeiro (pop- ulation 50,000); Juiz de Fora,. State of Minas Geraes (population 35,000) : Maceio, State of Alagoas (population 40,000) ; Parahyba, State or Parahyba do Norte (population 23,000) ; Uba, State of Rio de Janeiro (population 37,000) ; and Victoria, State of Espirito Santo (population 20,000). The above list is by no means complete. There- is an important cable and telegraph system operating be- tween Para and Manaos, this being owned by the Amazon Telegraph Co., a British concern. The concession extends for 50 years from 1895 and there is a subsidy of £17,500 per annum extending for -40 years from the commencement of operations. The Government may purchase the property on terms that are favorable to the stockhold- ers. The authorized and outstanding capitalization of the company is £250,000 shares of a par value of £10, and there are also outstand- ing £262,400 of an original issue of £300,000 debentures, bearing in- terest at 5 per cent per annum (issued in 1909 at 98 per cent), a cumulative sinking fund of 2£ per cent per annum retiring the bonds prior to July 1, 1935. In the event of the purchase of the property by the Brazilian Government the issue is N to be retired at 105 per cent. There is a general reserve of £40,000 and a reserve for renewal and maintenance of cable steamers of £14,500, and a balance carried forward in 1916 of £6,806. The dividends paid during recent years have been as follows: 1910-11, 4 per cent (initial dividend) ; 1911-12 and 1912-13, 4£ per cent free of income tax ; 1913-14, 3 per cent, less tax; 1914-15, none; 1915-16, 3 per cent; 1916-17, 4 per cent. The debentures were quoted at 89 in January, 1918, and the shares at 5 (£10 par). In addition to the various companies described in preceding para- graphs, there are numerous other enterprises of similar character, mostly under local management, providing light and power and in some instances tramway service to other cities, towns, and villages in the Republic. Although numerous towns and cities remain with- out proper public-utility service, it can not be said that Brazil is backward in this field. In the State of Sao Paulo alone there are no fewer than 160 cities and localities provided with electric lighting facilities, which are also extended to many of the coffee and agricul- tural estates in the outlying districts. POSSIBILITIES OF WATER-POWER DEVELOPMENT. The powerful waterfalls, of which Brazil has so many, assure the future of hydroelectric development, and as the great country grows in wealth and population there is little doubt that the demand for hydraulic power for lighting, manufacturing, and other purposes will substantially and steadily increase. It is calculated that the hydraulic power in the State of Sao Paulo is not less than 3,000,000 horsepower, of which not more than one-twelfth has been utilized. It has been stated that the immense Guayra Falls, in the interior, SOUTH AMERICA— BRAZIL. 173 at present almost unknown to the outside world, are more than 300 feet in height, about 2 miles in extent and discharge about 13,000,000 cubic feet of water every minute.. The hydraulic force has been calculated at 65,000,000 to 80,000,000 horsepower. Iguassu Falls, which is partly Brazilian, has a hydraulic force, it is stated, of nearly 15,000,000 horsepower. Other falls, rapids, and cascades exist by the thousands, yet scarcely a score are being used to furnish power. SECURITIES QUOTED ON STOCK EXCHANGE AT RIO DE JANEIRO. There follows a list of. important public-utility companies whose securities are quoted on the Stock Exchange at Rio de Janeiro : SHARES. Companies. Capita], Par value. Paid In. Reserves, etc. Last sale BrazUcirs de Energia Electrica Brazilian Traction, Light & Power Carioca Carris Urbanos •. Electricidade e Lavoura Electricidade e Machinas Electricidade de Sao Paulo e Rio Electricidade e Viac&o Urbana de Minas Geraes Fluminense de Forcae Luz Forca e Luz Cataguazes-Leopoldina Forcae Luz de Campos Forcae Rede Jahu Forca eLuz N. Fluminense Forcae Luz de Sao Paulo Forca eLuz de Palmyra Forca e Luz Rio Pret o Forcae Mineracao Sta. Anna Industrial de Electricidade Jardi m Botanico '. Luz Forca de Minas Geraes .' Mineira de Electricidade Mineira de Energia Electrica Faranaense de Electricidade Paulista de Electricidade PauJistade Forca eLuz Pernambuco Milreis. 30,000,000 4,000,000 2,500,000 6,000,000 120,000 300,000 1,200,000 1,500,000 500,000 400,000 2,450,000 205,000 550,000 2,500,000 200,000 345,000 45,000 2,000,000 ■21,000,000 800,000 2,500,000 200,000 650, 000 2,000,000 2,000,000 o2,000,000 Milreis. 200 200 100 100 100 200, 200 200 100 100 100 200 200 200 100 100 100 200 200 200 200 200 200 100 200 200 100 Milreis. 200 200 100 100 100 200 200 200 100 40 100 200 200 200 100 100 100 200 200 100 200 200 200 Milreis. 094,619 1,188,8,0 1,331,538 1,002,189 Milreis. 277,061 220 60 141,499 22,657 395,023 16,728 45,368 4,314,253 20 175 90 200 200 100 8,190 38,583 a 800,000 milreis outstanding. DEBENTURES. Companies. Total issue. Par value. Interest rate. Milreis. Milreis. Per cent. 1,200,000 200 8 300,000 100 10 300,000 200 8 a 400, 000 100 8 90,000 200 12 150,000 100 8 100,000 200 12 120,000 200 10 2,000,000 200 8- 6 1,500,000 200 8 Last sale. Electricidade de SSo Paulo e Rio. . . Fluminense de Forca e Luz Forca e Luz Cataguazes-Leopoldina Forgae Luz de Campos Forca e Luzde Jahu — » «.... Forca e Luz de Palmyra Forca e Luz RibeirSc Preto Forpa e Luz Ribeirao Preto (: ) Industrial de Electricidade Paulista de Forca eLuz Milreis. "ibi 202 35 o 374,200 milreis outstanding. *> 1 ,458,400 milreis outstanding. PORT AND HARBOR IMPROVEMENTS. The rapid development of the resources of Brazil and the con- sequent increase in foreign trade have necessitated extensive improve- ments of the ports and harbors, which exist in large numbers along 174 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. the vast Atlantic seaboard and in the rivers. Twenty years ago harbor facilities were almost negligible. To-day port works have been constructed in many large harbors and elaborate plans have been laid for further improvements. Some of these ports were con- structed for private companies to operate; others are Government enterprises. PORT OF PARA. The most northerly port handling ocean traffic is the port of Para (Belem), located on the southern side of the Amazon delta. The works were constructed by the Port of Para Co., a Farquhar-Pearson enterprise. A receiver was appointed for the company in 1914. The capitalization of the company at the time of receivership con- sisted of $10,500,000 6 per cent noncumulative participating preferred shares ($17,500,000 authorized) and $13,000,000 common stock ($15,000,000 authorized). The approximate bonded debt consisted of £3,600,000 5 per cent first-mortgage 50-year bonds and £2,500,000 5 per cent 60-year first-mortgage bonds (a large portion of the balance of the £5,000,000 bonds authorized were also pledged as collateral for loans). The company further guaranteed as to principal and interest £1,000,000 6 per cent bonds of the Madeira-Mamore Railway (see p. 156). Some of the properties controlled by the Port of Para Co. were as follows: Upward of 7,500 feet of quays and wharves for ocean-going and river steamers. About 84 acres of reclaimed land behind the quay walls, on which are situated 15 warehouses, having an area of more than 380,000 square feet, to- gether with electric cranes, etc. An electric power house. An administration office building, completed in August, 1913. A complete ship-repairing yari with two floating docks in deep water, each capable of lifting 1,800 tons dead weight and placed at the end of a steel jetty connected with large machine shops, foundry, etc. These shops also serve three slipways, each capable of handling vessels up to 800 tons. A coal depot and depot for inflammables ; also three steel oil-storage tanks with a capacity of 24,000 tons of fuel oil. Other works wholly or partly carried out consisted of: (1) Three miles of entrance channel, dredged to the depth of 30 feet below low water, giving access to the quays. The channel has been buoyed with 20 illuminated buoys and with other buoys enabling the quays to be approached by night. (2) A new boulevard 6,000 feet in length by 98 feet in width. (3) A training bank on the side of the channel to guide the flow of the river in order to maintain the depth of water in the approach channel. (4) Customhouse, post office, and telegraph office. The Port of Para Co., in 1911, acquired control of the Amazon Eiver Steam Navigation Co. (Ltd.), which carriecL^an annual sub- vention of about $335,000 and which was considered te,be a most im- portant factor in the development of river navigation. - In 1912 the Amazon River Navigation Co. acquired control of the Companhia Navegacao do Amazonas and amalgamated the fleets of the two com- panies. The Port of Para Co. made large advances to the steamer lines. In addition to the port works and the river steamer lines, the Port of Para Co. organized the Amazon River Land & Colonization Go., with the object of developing lands suitable for agriculture and graz- SOUTH AMERICA BRAZIL. 175 ing. Funds were advanced by the parent company to cover pre- liminary expenses of the Colonization Co. The cost of construction and equipment of the Port of Para and the other port developments of the company was stated in 1913 to amount jto $50,693,206. PORT OF MANAOS. The harbor works of the port of Manaos were constructed and have been operated by the Manaos Harbor (Ltd.). The concession was dated 1902, and the time limit fixed was 60 years. Valuable warehouses are also owned by the company. The capitalization con- sists of £300,000 7 per cent cumulative preference shares and £200,000 ordinary or founders' shares; also £350,000 5 per cent debentures, due 1936, interest payable June and December (issued in 1908 at par; quoted 58 January, 1918), and £141,800 sinking fund second debentures to be retired annually until 1945. Dividends on the pref- erence shares were paid in full, 1903 to 1913, inclusive, being passed at the outbreak of war in 1914. Dividend rates on the ordinary shares during the same period have been as follows: 1903-4, 10 per cent (13 months) ; 1904-5, 15 per cent; 1905-6, 15 per cent; 1906-7 and 1907-8, none; 1908-9 to 1911-12, 7 per cent each; 1912-13 to 1915-16, none. The harbor works at Manaos, which is located on the Amazon River, 924 miles above Para and near the junction with the Madeira River, consist of a fine stone wall over 1,500 feet in length, large floating docks joined to the wall by a bridge some 550 feet in length, 16 electrically equipped warehouses, etc. The company constructed at its own expense a very substantial customhouse and presented it to the Republic. The depression in rubber dating from a period not long before the outbreak of the European war caused a decrease in the revenues of this company, which previously had enjoyed consid- erable prosperity. PORT ANTONIO. There is another inland port in the Amazon district, at Port An- tonio, on the Madeira River, 1,800 miles from the Atlantic Ocean. This was laid out by the Madeira -Ma more Railway (which see). The water at this point is of sufficient depth to accommodate ocean- going steamers. The Madeira-Mamore Railway commences at this point and routes traffic around the dangerous falls and rapids of the Madeira and Mamore Rivers and affords connection with the rubbei districts of eastern Bolivia and western Brazil. PORTS BETWEEN PARA AND PERNAMBUCO. The harbors between Para and Pernambuco (Recife) have been developed only in a limited manner and, owing to lack of railways running to the interior, have not assumed the importance that they will some day doubtless attain. These ports include : (1) Sao Luiz (population 50,000), which is the capital of the State of Maranhao. This city is located on an island and is some- what difficult to reach owing to shifting sands. Plans are under way to dredge this harbor and to construct a floating dock. (2) Tutoya, an excellent port with, however, but little traffic, lo- cated at the mouth of the Parnahyba River, which runs southward into the State of Piauhy. 176 INVESTMENTS IN LATIN AMERICA AND BKITISH WEST INDIES. (3) Amarracao, of little commercial importance. (4) Camocim, a railway terminal in the State of Ceara and the outlet for good country. Projects have been laid for a 500-foot sea wall and for a floating dock. (5) Fortaleza, a city of 50,000 inhabitants and capital of the State of Ceara. Improvements are to be effected through dredging and the construction of a breakwater. (6) Natal, capital of Eio Grande do Norte, which has been im- proved and will probably assume considerable commercial impor- tance. (7) Cabedello, chief city of Parahyba do Norte, the harbor of which is to be bettered through dredging and the wharves of which are to be enlarged. PORT OF PERNAMBUCO. Pernambuco, the nearest Brazilian port to Europe and one of the largest and most important cities in the Republic, is not sufficiently provided with harbor improvements. A large sum has been voted for the construction of a protecting sea wall, a stone jetty, quays, etc. This work will, it is estimated, cost between $25,000,000 and $30,000,000. PORTS OF JARAGUA AND ARACAJU. Jaragua, inAlago,as, and Aracaju, in Sergipe, are the only ports of any size between Pernambuco and Bahia. Port works are pro- jected at the former place to cost, it is estimated, $6,318,000, the work to include a long breakwater. Concessions were given some time ago to improve the channel at Aracaju and otherwise better harbor condi- tions, but this concession has been canceled, it is said, the proposition remaining open. PORT OF BAHIA. The concession for the construction of port works at Bahia was granted some years ago to the Companhia Concessionaria das Docas do Porto da Bahia (Port of Bahia Co.), incorporated in 1902. The capitalization of the company consists of 50,000,000 milreis shares and £3,000,000 5 per cent bonds, repayable by sinking fund 1923 to 1972 and a lien on the port works, etc. A total of 70 per cent of the net revenues of the port was assigned to service of the issue, and if this proved insufficient 2 per cent of the import duties of the port were likewise to be assignable. The bonds were originally issued £2,500,- 000 in Paris and £500,000 in London. Interest was suspended at the outbreak of the European war. The work has not been fully com- pleted. The net revenues for 1914 were 1,395,974 milreis and for 1915 2,962,202 milreis. The high price for the bonds since 1911 was 97, and the quotation early in 1917 was 46. The bay on which Bahia is situated is about 25 miles wide and 20 miles in depth and provides good anchorage for large steamers. When the docks, etc., are fully completed the port is certain to make very substantial progress, as it is the center for a rich and productive territory. Additional railways will further increase production and assure larger revenues to the enterprise. The port works may be purchased by the Government in 1922, upon payment of a fixed sum sufficient to assure profit to the then owners. SOUTH AMERICA— BRAZIL. 177 PORT OP VICTORIA. Victoria,- capital of Espirito Santp, is the only place of importance between Bahia and Rio de Janeiro. Some day it will doubtless be- come a large port, destined to receive large shipments of minerals, especially if the iron deposits of Minas Geraes are fully exploited. A, quay, more than half a mile in length is projected at this place, in addition to other works, the estimated total cost to exceed $4,000,000. Small ports, capable of taking care of vessels, of moderate size, exist between Victoria and Rio, de Janeiro, these including Sao Joao da Barra at the mouth of the Parahyba River, Imbetiba, on the Leopold- ina Railway, and Cabo Frio. PORT OF RIO DE JANEIRO. Much has been done to improve the magnificent harbor of Rio de Janeiro, largely through the proceeds of loans and through import taxes. The Brazil Railway Co. also constructed, important works at the port, these being described on page 150. There is an extensive quay of granite construction 2j miles in length, a great floating dock that will berth vessels of more than 20,000 tons, a floating crane, etc. Large warehouses have also been provided. PORT OF SANTOS. Santos, the port of Sao Paulo and the greatest coffee-shipping place in the world, has been greatly improved during recent years. The principal docks are owned by the Santos Dock Co. (Companhia Docas de Santos), an important local company capitalized at 60,000,- 000 milreis shares and 60,000,000 6 per cent debentures, interest Janu- ary and July. These debentures, which are issued in 200-milreis denominations, recently sold at 206 milreis (103 per cent) and rank among the best Brazilian investments. The 200-milreis shares were quoted at Rio de Janeiro May, 1917, at 451 milreis (225£ per cent). Large dividends have been paid on these shares, and the company has enjoyed a most successful career. PORTS BETWEEN SANTOS AND RIO GRANDE DO SUL. Between Santos and Rio Grande do Sul there are several small ports. The most important of these are: (1) Paranagua, which is to be improved and which is the terminus of the important railway running to Curitiba and Ponta Grossa. (2) Sao Francisco, destined to assume great importance as a port for shipment of lumber and other products and a railway terminus for lines in Santa Catharina. Plans have been laid, but thus far only partly carried out, to make this port the terminus of a through railway system to Iguassu Falls and thence to Asuncion, Paraguay. (3) and (4) Florianopolis and Laguna, both with great future prospects and both in need of bet- terments. In the chapter on "Railway development" (see Brazil Railway), the port works at Rio Grande do Sul have been discussed briefly. These undertakings carried out by the Brazil Railway were very ex- tensive. Port improvements at Porto Alegre and Pelotas are also be- ing made or are projected. raoas — is — 12 178 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. STEAMSHIP LINES. There are several international and coastal lines flying the Brazil- ian flag. By far the most important of these lines is the Lloyd Brasileiro, which is virtually a Government line and which operates to various foreign ports. The Companhia Nacional de Navegacao Costeira, controlled by Lage Bros., a local concern, and the Com- panhia Commercio e Navegacao are also of considerable importance. There follows a table published in the Diario Official just before the outbreak of the war showing the tonnage, etc., of Brazilian ships: Companies. Capita). Number of ships. Gross tonnage. Receipts. Passengers. Freight. .Lloyd Brasileiro Navegacao do Amazonas, Tocantins, Araguaya Companhia de Navegacao Rio Parnahy ba Companhia de Navegacao Alto Pamahyba Empreza de Navegacao Baixo S. Francisco Empreza de Navegac&o Bahiana Empreza de Navegac&o Viacao de 6. Francisco. Navegacao do Sul do Rio de Janeiro Navegacao do Xbucuhy e Uruguay Companhia Commercio e Navegacao Companhia Nacional de Navegacao Costeira E mpreza de Navegacao Espirito Santo, etc Companhia de Navegacao S. Jofio da Barra Empreza Navegacao Hoecke & Mello & Co Jose Barbosada Silva Navegacao Mello, Frotas Companhia Pemambucana Milrdi. 6,000,000 12,500,000 150,000 250,000 3,806,000 250,000 400,000 550,000 5,000,000 3,500,000 200,000 1,347,000 Total. 106,204 126 1,062 146 166 3,572 267 752 39,357 14,454 900 2,250 1,1*4 1,808 1,750 707 Milrds. 7,565,138 22,713 151,340 1,628 11,859 262,379 156,903 11,977 36,877 1,380,422 4,714 3,448 108,279 287.382 136, 108 53,603 Milrdt. 11,252,040 24,264 280,644 37,854 175 576,584 340,613 100,313 70,771 5,504,383 4,384,313 169,035 999,074 392,213 798,658 456,926 242,220 173 174,705 10,194,770 6 25,630,080 a 79,127 first-class and 123,713 other passengers handled. i 1,985,868 tons handled. The Lloyd Brasileiro has at the present time G6 ships with a gross tonnage of 126,000. Certain of its bonds have been issued abroad, guaranteed by the Government of Brazil and virtually recognized as external obligations (see the account of government loans). The company during the past two years has earned considerable profits. The Companhia Nacional de Navegacao Gosteira confines its op- erations to coastwise passenger and freight service. Its capitaliza- tion is shown in a subsequent table. The Companhia Commercio e Navegagao confines its operations to freight traffic, its ships touching at most of the local ports. Twenty steamers are operated at the present time, with a gross tonnage of 55,500. The Empreza de Navegagao Bahiana (Bahia Navigation Co.) owns 16 steamships and 1 sailing vessel. The company has in recent years usually reported deficits. The withdrawal of the annual Govern- ment subsidy of $75,000 in 1915 and 1916 considerably increased the annual deficit. Operating results during the years mentioned have been as follows (United States currency) : Item. Expenses Receipts ... 1 Operating deficits S489,SS0 309,238 So63,050 376,520 180,642 186,530 SOUTH AMERICA BRAZIL. 179 The Federal Government is said to be negotiating for the purchase of this line. The Empreza de Navegagao e Viacao de Sao Francisco is owned by the State of Bahia. This line, which operates on the Sao Francisco River and its tributaries, tapping rich areas, receives an annual sub- vention of $50,000 from the Federal Government. Gross receipts from operation in 1916 totaled $154,088, Government subsidy $50,000, operating expenses $138,943, and profit $65,045. The following tables indicate the capitalization of various com- panies, together with latest quotation for shares and debentures and other information. The data are taken from the record of securities quoted on the Stock Exchange of Rio de Janeiro on March 31, 1917: SHAKES. Companies. Capital. Par value. Funds and reserves. Last Milreis. Navegae&o Kio Sao Paulo 400, 000 Brasileira de Navegacao I 500, 000 Cantareira e Viaeao Fluminenso ( 10,000,000 Commercio e Navegacao 110, 000, 000 National de Navegacao Costeira 11,000, 000 Navegacao do Amazonas ' 15, 500, 000 Rio Grandense I 600, 000 Sao Joao da Barra e Campos 1, 346, 800 Lloyd Brasileiro 13,500,000 Milreis. 200 200 200 200 200 200 100 «200 200 Milreis. Milreis. 44,595 387, 169 8,023,804 5,947,028 215 200 269,498 170 a 80 milreis paid in. DEBENTURES. Companies. Issued. Par value. Interest rate. Commercio e Navegagao National do Navegacao Costeira. Navegagao Rio de Janeiro Milreis. 6,000,000 17,150,001 300,003 -Milreis. 203 200 200 Per cent. 7 7 Milreis. 185 200 " The amount outstanding is 12,993,000 milreis. MINING ENTERPRISES. Although Brazil contains enormous quantities of minerals of var- ioue kinds, the only three varieties extensively mined at present are manganese, gold, and diamonds. MANGANESE INDUSTRY. Manganese has taken the lead by a very large margin, the exports of this metal (largely because of the war) having expanded by leaps' and bounds. During the first six months of 1917, 245,088 tons were exported, valued at approximately $5,500,000. During the calendar year 1916 503,000 tons were exported, valued at $7,084,954. For the first six months of 1914 shipments of manganese totaled 85,500 tons, valued at approximately $600,000. The total exports from Rio de Janeiro during 1914, 1915, and 1916 amounted to 144,734, 309,886. and 432,435 tons. The manganese mines are variously located in the States of Minas Geraes, Matto Grosso, Bahia, and elsewhere, the deposits located in 180 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. Minas occupying a position of considerable importance, owing to their accessibility to the port of Rio de Janiero. The ore reserves are very large, the Urucum deposit in Matto Grosso containing, it is esti- mated, 30,000,000 tons of undeveloped ore, the Quelez deposits in Minas Geraes containing 5,000,000 tons, and other developed and un developed properties large amounts. The average composition of the dry Brazilian ore is: Metallic manganese, 52 to 53 per cent; iron, 3 to 3£ per cent; silica, 1J to 2 per cent ; phosphorus, 0.03 to 0.04 per cent. American interests have recently entered the Brazilian manganese field. Most of the remaining capital invested is of local origin. The transportation of manganese ore has proved a remunerative source of income to the Government's Central of Brazil Railway. The Quelez ore deposit of which mention has been made is located about 300 miles from Rio de Janeiro, while the Urucum deposit, in Matto Grosso, is about 18 miles from Corumba, the head of naviga- tion of the Paraguay River, and is no great distance f *om the North- western of Brazil Railway. One of the deposits in the State of Bahia is at Villa Nova, about 300 miles from the port bearing the same name, while another deposit is located at Nazareth, only a few miles from the city. The Miguel Burnier deposit in Minas Geraes, which is in limestone, is said to be 6 miles in length running from east to west. Extraction costs at this mine exceed costs at the Quelez and other deposits. The future of the manganese industry is assured, provided better transportation facilities are secured. The ore from the mines at Nazareth, Bahia, which are under American management, has to be taken by lighter to the 'port of Bahia and there transshipped for America or Europe. The insufficient number of lighters and ships is greatly curtailing the production of this mine, while lack of rail- ways and good roads prevents the expansion of those in the interior. GOLD MINING. Gold, the mineral that served as a magnet to attract early settlers to Brazil, is found in many of the State*. There are two important mines now in operation, both under British ownership and manage- ment. These are worked by the St. John del Rey Mining Co. (Ltd.) and the Ouro Preto Gold 'Mines of Brazil (Ltd.). The St. John del Rey mine is located at Villa Nova de Lima, State of Minas Geraes, and is a very old property, having been worked since the year 1830. Between 1835 and 1862 the production of the mine was 59,098,654 troy pounds of gold valued at approximately $11,000,000. In 1849, 69,446 tons of ore were produced and the results from crush- ings were £38,136 profits. In 1865 the profits were £80,438 and the production 78,883 tons. In 1886 a cave-in made it impossible to operate the mine. The property was reconstructed in 1887, and the present company was registered July 24, 1888. The capitalization consists of £100,000 10 per cent noncnmulative first preference stock, £100,000 10 per cent noncumulative second preference stock (un- issued), and £546,265 ordinary stock (£600,000 authorized); £1,800 7 per cent bonds matured March, 1918. The par value of shares is £1. Full dividends of 10 per cent per annum have been paid on the preference stock, and during recent years the rates on the ordi- SOUTH AMERICA BRAZIL.. 181 nary stock have been: 1903-4 and 1904-5, 5 per. cent; 1905-6, 2.92 per cent; 1906-7, 24 per cent; 1907-8, 5 per cent; 1908-9, 6.67 per cent ; 1909^-10, 8.33 per cent ; 1910-11, 9.17 per cent ; 1911-12 to 1916, 10 per cent per annum. The production of this mine from 1837 to the caving in of the shaft in 1886' was 58£ tons of refined gold. The property employs from 800 to 1,000 workers and supports a population of nearly 10,000. During a recent year 192,600 tons of ore were treated and 1,145,788 oitavos of gold produced (1 oitavo equals 3.586 grams), an average of 6.438 oitavos per ton. The percentage of the gold contents of the ore recovered was 92.40. The depth of the shaft thus far driven exceeds 1 mile 1 , and the property is still far from being exhausted. The report of the company for the year ended February 28, 1917, stated that since March 1, 1901, the sum of £567,283 had been taken out of profits for capital works and redemption of bonds. The total value of assets of the company was stated as £1,507,492. The gross receipts from operation for the year ended February 28, 1917, were £450,280 and the operating and development expenses were £291,096, the balance of profits being £i59,185. Including other income the total net receipts were £172,387 and the surplus £132,637. Of this total sum, £50,000 was transferred to capital works account and £10,000 to reserve fund. After transferring these sums and after paying the 10 per cent dividend on the outstanding stocks and £800 donated to war funds, there was carried forward the sum of £4,057. The tonnage crushed at the mill during 1916-17 was 187,400, the amount realized averaging 50s. 3^d. per ton. The decrease in ton- nage crushed as compared with 1915-16 was 5,100, the loss in tonnage being offset by the production of a larger percentage of gold. A quotation of 17s. 9d. for the £1 ordinary shares, as of January, 1918, compares with an approximate price of 16s. at the closing of the London Stock Exchange, July 27, 1914. The preference shares (£1) were quoted 25s. 6d. January, 1918. The Ouro Preto Gold Mines of Brazil, an Anglo-French company^ operates the Passagem mine, located about 5 miles from Ouro Preto,. Province of Minas Geraes. The property is an old one, having been worked at the commencement of the nineteenth century. The pres- ent company was incorporated in 1914, as a reconstruction of a com- pany with a similar name, registered 1893. There are £60,000 10 per cent and participating preference shares outstanding, which rank pari passu with the £40,000 ordinary shares for dividends in excess of 10 per cent. The amount of gold produced in 1914 was £114,569 ; in 1915, £120,591 ; and in 1916 slightly more than £120,000. The first stamp mill placed in operation in Brazil (1819) was used at this mine. The average thickness of the ore lode was for manj years 3 meters, but this has since narrowed to about 2£ meters. The ore is crushed to pass through 30 mesh screenings, and about 12 tons of water are used to 1 of ore. Complete treatment takes three days. The company owns an electric plant, which furnishes light to the surface workings and buildings and to the village of Mananna. About 1,000 men are usually employed. The company was recently stated to have options on the Maquine and Santa Ana mines located near the Passagem mine, both properties being believed to hold con- siderable promise. 182 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. There are several other British and French companies engaged in gold mining, none of which have as yet attained the results shown by the St. John del Rey and Ouro Preto properties. There are a number of small properties that are now being worked or have been in the past, and considerable additional development is expected to follow the improvement in the transportation systems of the Re- public. The Congo Socco mine in the Itabira district may be men- tioned as important among the earlier producers. Concerning gold deposits in Brazil, a recent review in the London Times stated as follows: In nearly all States of Brazil gold has been discovered and is being extracted. The important auriferous lodes in Brazil are grouped around three mountain chains, which, so to speak, form the skeleton of the country. The Mantiqueira chain, which comes from the State of Sao Paulo and is de- tached from the Espinhaco chain, which crosses the State of Minas from north to south, penetrates into the State of Bahia and ends in that of Pernambueo. In the second place, the watershed which separates the waters of the River Sao Francisco from those of the River Plate serves as a boundary between the States of Minas and Goyaz, and continues into the State of Piauhy and ends in that of Ceara. A third line extends along the right of the Rivers Paraguay and Ara- guay. It is to the latter that the chain of Parecis in the State of Matto Grosso belongs. The most worked mines are those of the Espinhaco chain ; they are grouped along a straight meridian line running from the town of Barabacena, in the State of Minas, to Jacobina, in the State of Bahia, over an expanse of more than 1,200 kilometers (746 miles). The principal areas under active operation com- prise Morro Velho (see St. John del Rey mines), which is very prosperous; Passagem (See Ouro Preto mines), which is meeting with success; Sao Bento, which possesses modern installations for cyanidation; Sao Luiz, which has a similar equipment ; and Descoberto, which is a new field, the extracting of gold having commenced in 1903. The Morro Velho mine (see St. John del Rey mines) is one of the principal gold mines of Brazil, and from 1837 to 1886 it produced 58J tons of refined gold. A considerable amount of dredging work has been carried on in the past with varied success, a number of the dredging companies having been very much overcapitalized. It was estimated before the outbreak of the war that a capital of about $160,000 was suf- ficient for each dredge employed. Two grains of gold, it was esti- mated, should be saved to each cubic yard dredged, and the cost of operating a dredge of 3 to 5 foot capacity per bucket, working 120 hours per week, should not be much in excess of $1,200 per month. An extraction of 80 cubic yards per hour ought to produce a profit of nearly $20,000 per annum. COPPER MINING. Copper exists in numerous sections of Brazil, although the present production is very small. A number of sporadic attempts have been made to develop some of the ore bodies, without great success during recent years; nevertheless, the future of this branch of the mining industry holds considerable promise. A mass of native copper weighing more than 2,600 pounds was discovered a number of years ago near the city of Bahia. The State of Bahia contains many known deposits of copper, and many of the deposits, it is said, might undoubtedly be developed successfully. Among the known copper districts of Bahia are the following: (1) Along the Verde River, not far from the boundary with Minas Geraes; (2) at Condeuba. in the southern part of the State; (3) at Maracas, in the south-central part of the State; (4) the Carahyba SOUTH AMERICA — BRAZIL. 183 mines at Praba, Jaguary district, In the north; (5) at Patemute, in the north; (6) at Jacobina, in the central districts; also at Curaca, near Bahia, at Chapa del Velho in the west, and elsewhere. The State of Bio Grande do Sid in the far south of the Republic also holds considerable promise. Well-organized attempts have been made in this State to mine and smelt the copper. An extensive property was opened up in this State a few years ago, this being located at Camaquam, about 2 miles from the river of that name and about 50 miles from Eio Negro, a station on the Brazil Great South- ern fiailway. This property, on the average, gave assays of about 6.5 per cent copper and 30 grams of gold per metric ton. At Caca- pava, in this State, several properties of moderate size have been developed with unknown results- Other small mines variously lo- cated Lave also been worked in a small way. The State of Minas Geraes, which has thus far proved the most important mining district in the Eepublic, will probably rank next to Eio Grande do Sul and Bahia as a future producer of copper. Deposits have been located at Lavras, where a certain amount of development has been carried on with varying success; also near Ouro Preto, one of the important towns of the State. Other out- croppings of the mineral have also been discovered, these being vari- ously located. Not far from Campos, an important city on the Leopoldina Eail- way, in the State of Rio de Janeiro, copper ore has been located in promising quantities. There is also a deposit near Sao Joao da Barra. In Ceara, Goyaz, Matto Grosso, Parana, and Eio Grande do Norte, ore deposits, more or less promising, have been located. In Maran- hao, within the municipality of Chapado, an ore body of some size has been located. In Sao Paulo several attempts have been made to develop copper deposits in the mountains, but presumably all of the mines, which were mostly small, have been abandoned, inasmuch as the copper was found to occur only in small pocketlike veins. In the far interior of the State there are traces of copper, but the quality of the ore deposits is unknown. Many of the ore bodies already discovered are located at consider- able distances from railways and rivers and are not readily accessible owing to the absence of roads and other means of conveyance. It is probable, however, as the development of this great Eepublic is carried forward, that copper mining will take a high place among the nation's industries and that the annual value of its production will be surpassed only by manganese, gold, and diamonds. The Carahyba Copper Mine (Minas de Cobre de Carahyba), lo- cated at Praba, Jaguarary, State of Bahia, of which mention has previously been made, was originally opened in 1783. The mining property covers 6,000 hectares (14,826 acres) and is about 30 miles from a railroad. The mine has been worked at intervals, and a smelter was at one time constructed on the property. In 1903 a British concern carried on a certain amount of work at the mine but subsequently abandoned it. It is said that, although the area of this property is considerable, the depth of the ore bodies has never been accurately determined. The Societe des Mines de Cuivre du Camaquam was organized in Belgium during 1899 to work the mines at Camaquam, in the State of 184 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Rio Grande do Sul. The capitalization of this company was 1,900,000 francs, in shares of 500 francs par, as well as 250,000 francs debentures. The equipment of this company included a mining plant of fair size and importance, with a hydroelectric installation. Water power, it was found, was sufficient to run the company's 80-ton mill the whole year round. A small smelter was erected. In the year 1907 the production of copper was about 2,000,000 pounds. It is said that operations were later suspended. The head office of this company was at Brussels, Belgium. A French company known as the Soeiete Anonyme des Mines de Cuivre du Seibal, organized in Paris in 1903, with a capitalization of 415,000 francs, also formerly operated at Camaquam. Its property, located not far from the Belgian property just described, carries gold, silver, and copper. Although a fair sum was spent in development work, the property is presumed to have been abandoned by the com- pany and was, at last accounts, idle. DIAMOND MINING. The diamond-mining industry of Brazil dates from the year 1721, when the first stone was discovered by a gold miner named Bernardo da Fonseca Lobo. The Government took prompt steps to develop the industry, and within 10 years of the date of discovery between 35,000 and 40,000 men were at work in the diamond fields. The ex- portation of the precious stones during the 40-vear period 1732-1771 totaled 1,666,569 carats valued at not less than $17,500,000. Among the various diamond fields that of Diamantina is one of the most important and widely known. The city of Diamantina, located in the State of Minas, about 500 miles from Rio de Janeiro, has a population of about 15,000 and is the center of the district. Within the district are the headwaters of the rivers Arassuahy, Doce, and Jequitinhonha, and the area is filled with deep ravines with numerous small streams, which become swollen and even turbulent during the rainy seasons, working out potholes in their beds in which diamonds are most likely to be found. About 70 years ago one of these pot- holes was found to contain diamonds weighing a total of 10 pounds and about 28 pounds of gold. The gems are also found in the ranges in a sort of bluish clay deposit, in beds of various thicknesses, inter- stratified through a great mass of multicolored clays, stained by oxides and organic matter. The rocks in which these deposits exist consist of sandstone and schist. Other diamond deposits in Minas Geraes are at Grao Mogul (Grand Mogul), about 100 miles north of Diamantina (discovered 1771) ; at Sao Joao de Chapida, 13 miles from Diamantina; at Boa Vista, Serrinha Bagagem (Estrella do Sul), etc. Bagagem is lo- cated 250 miles from Diamantina, near the boundary with the State of Sao Paulo. In the river bearing a similar name and near the place mentioned, there were discovered three famous diamonds — (1) the Estrella do Sul, found in 1853, which weighed 254.5 carats uncut and 125.5 carats cut; (2) the diamond of Dresden (year 1857), weighing 117.5 carats uncut and 76.5 carats cut; and (3) the Estrella de Minas, weighing 175 carats. The diamond that was given the name of Estrella do Sul was sold to the Gaekwar of Baroda for SOUTH AMERICA — BRAZIL. 185 £80,000, while the Dresden stone realized £40,000 and was purchased by the same Eastern ruler. In addition to the various diamond fields of Minas Geraes, stones have been located in Parana, Bahia, Goyaz, Matto Grosso, and Sao Paulo. The Parana deposits are found in various rivers, including the Yapo and the Tipagy. The gems found in this State usually run small but are of excellent quality. The Bahia fields extend from Sincora on the south to Morro do Chepeu on the north and cover a considerable area. Several years ago a somewhat extensive discov- ery of the gems was made at Itapicuru, in Bahia, this new field hold- ing considerable promise. In Goyaz the discoveries were of recent date and were principally in the Graca Eiver, which is a tributary of the Araguaya. In 1906 a stone of 600 carats was located in the Yerissimo Eiver in the southern part of the State, but was partly de- stroyed by being tested on an anvil with a heavy hammer and split into small fragments. The Matto Grosso diamonds are found mostly in Coxipo Mirim Eiver and are generally small, the largest found be- ing about 5 carats. A number of dredges have from time to time worked this district with varying success. The Sao Paulo diamond field is a continuation of the Minas Geraes fluvial deposits, and the stones are found mostly in the rivers Sapucahy-Mirim and Verde. These deposits have not as yet assumed great importance. Statistics concerning diamond production in Brazil are almost im- possible to obtain. It is said, however, that more than 4 tons of the gems have been obtained during the two centuries since their original discovery in the Bepublic. Up to 1771, as stated, production totaled about $17,500,000, and from that year until 1850 approximately $35,- 000,000. Later figures are based wholly on estimates. There is a certain amount of mystery concerning production and exports, and it is commonly said that many so-called Cape diamonds on the Euro- pean markets originated in Brazil. IRON ORE. Brazil probably contains the richest and largest undeveloped iron- ore deposits in the world. Iron exists, it is said, in every State in Brazil. The deposits existing in the State of Minas Geraes are so vast that they consist often of actual mountains, and cover, it is esti- mated, 247,000,000 cubic meters. The quantity of the ore thus far surveyed, existing in 52 outcroppings in Minas Geraes, is estimated by Government engineers to total as high as 12,000,000,000 tons of the highest grade. Iron was discovered in Brazil in 1589 by a Paulist priest. In 1600 a foundry was established at Ipanema, State of Sao Paulo, this being, it is said, the first iron foundry to work in the Western Hemisphere. This establishment was closed down in 1620, reopened at various times, and enlarged in 1810, working from that year almost con- tinuously until about 1895. Its production during that period aver- aged from 3 to 4 tons daily. A number of the iron deposits have been acquired by American, British, French, and German interests. Among the interests con- trolling these properties are a number of iron-ore operators from Minnesota and Wisconsin, the St. John del Eey Mining Co. (see "Gold mining"), and the Itabira Iron Ore Co. (British). The St. 186 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. John del Rey Mining Co. owns 90,886 acres of property containing iron ore. Mr. Chalmers, the present manager of the company, stated in the stockholders' report for 1912 (on file at the Bureau of Foreign and Domestic Commerce, Washington) that one can travel for 23 miles in one direction and for 16 in another direction on outcrops of ore, canga, or rubble. In one deposit the surface ore in sight is 30,000,000 tons of 60 per cent pdre ore; and it may safely be esti- mated that the tonnage would total 160,000,000. This deposit is one of a number on the property. The assays from 570 samples tested by Mr. Chalmers averaged 67.3 per cent iron and 0.053 per cent phos- phorus. These ore deposits have thus far not been developed, but may be said to be of considerable importance. The American interests controlling properties in Brazil have incor- porated as the Brazilian Iron & Steel Co. Their ore deposits are lo- cated in the eastern part of the district near the headwaters of the Doce River. The iron-ore district of Minas is northward from Rio de Janeiro and is reached by the Central of Brazil Railway and by the Leo- poldina Railway. A line from the port of Victoria will also tap a portion of the field. The altitude of the iron district varies from 2,000 to 6,000 feet, and the climate is generally good. Owing to the uneven character of the country, railway traffic is at present limited. Wagon roads are almost unknown, and the only facilities for travel, aside from the railroads, are the few rough mule trails. Concerning the iron ores of Minas Geraes, the following excerpt from an article by E. C. Harder, " The Iron Deposits of Brazil," which appeared in the South American for May, 1917, may be of interest : The iron ores of Minas Geraes are associated with a series of ancient-folded and metamorphosed sedimentary rocks. One of the beds composing this sedi- mentary series is an iron-bearing quartzite called itabirite, and in this are found the principal iron-ore deposits. The rock beds are complexly folded, so that in many places they stand on end, and the outcropping belts of the iron- bearing quartzite wind back and forth through the district over an area about 60 miles wide east and west and more than 100 miles long. Throughout this region iron-ore deposits of more or less importance occur along the belts of iron-bearing quartzite, the principal ores being found as lenses interlayered with the quartzite. Such lenses of ore range up to more than 2 miles in length and up to several thousand feet in thickness, although bodies of this size are exceptional. Some lenses consist of pure, hard hematite; others of soft, powdery hematite; and others of soft hematite with more or less intermixed sandy or clay material. The hard ores crop out prominently, in many instances forming the summits of mountains or ridges that are landmarks for miles around. The soft ores usually do not show on the surface. The disintegration and breaking up of the iron-bearing quartzite and ore by erosion results in the formation of a hard surface crust of ore of varying thickness over most of the ore-bearing areas. This is due in part to the removal of impurities by surface waters, leaving the iron oxide more concentrated, and in part to the mechanical accumulation of blocks and particles of iron ore on the lower slopes of ridges. Iron oxide cements the loose materials into compact blanket deposits known as " canga." The canga covers large areas and in places varies up to 50 feet in thickness. Only low brush grows on it because of its hardness, and thus iron-bearing areas throughout the district are com- monly barren of trees and but sparsely covered with other vegetation. Thus far the development in the iron fields has been extremely slow. High costs of coal and other fuel that might fill requirements have prevented the operation of smelters of sufficient size to warrant the investment of capital in them. As will be indicated in a later SOUTH AMERICA — BRAZIL. 187 paragraph, coal exists in Brazil, but thus far its quality is hardly good enough or its supply sufficient to be of use in the iron industry. Oil fields are being prospected, and there is a possibility that sufficient petroleum may in time be obtained to run the smelters. There is a likelihood that electric smelting may come into use. Some experi- ments have proved that this is practicable. It seems probable, how- ever, that most of the ore will, for a time, have to be sent to foreign markets for smelting. Lack of fuel supply and a scarcity of ships for transportation purposes, coupled with insufficient railway facilities,' are thus the cause of the slow development in the iron industry. The war and the consequent high prices obtainable for the ore may, how- ever, bring about a great expansion in the industry at an early date. Estimates of the quantity of ore existing in Minas vary from 2.500,- 000,000 tons to 12,000,000,000 tons, the latter estimate, as stated, be- ing by Government engineers. There is a large quantity of iron in the State of Parana. A de- posit has been located at Bom Ketiro do Mundo Novo (Antonina),, about 3 miles from the Atlantic, a near-by port being accessible to vessels of about 300 tons. About 6,000,000 tons of ore have here been located. A large deposit also exists in the interior of Bahia, and one of the extensions of the Bahia Railway system was surveyed with the idea of developing this iron-ore body, which, is extremely large and rich. In the various States of southern Brazil, including Rio Grande do Sul and Santa Catharina, considerable ore bodies have been located, and these hold promise of successful development fol- lowing the investment of capital. Some of these iron bodies have been mined and smelted, but only in the most primitive way, by means of a few small charcoal furnaces. COAL MINING. The presence of coal has long been known in Brazil and the prod- uct haf long been mined in a somewhat primitive way. Recently, however, the rising cost and the difficulty of obtaining the mineral from Europe and the United States have caused renewed interest in the development of the local mines. The principal coal deposits exist at Tuberao, in the State of Santa Catharina, and at Xarquedeas (Sao Jeronymo Railway & Mining Co.), Candiota, Rio Negro, and Jaguarao in the State of Rio Grande do Sul. Deposits of consider- able size and probable importance have also been located at Quixam- binha, in Pernambuco, in the State of Parana, and elsewhere. Lig- nite occurs in Minas Geraes, and peat has been found in various States. American interests have recently made extensive purchases of coal lands in the State of Parana and are expected to develop the prop- erties extensively. The veins of coal at Tuberao attain a thickness of about 10 feet, while those at Xarquedas reach a thickness of about 13 feet. The Candiota seams vary in thickness from 4 to 10 feet. The Sao Jer- onymo Co.'s property at Xarquedas has been in active operation for some years and produces upward of 20,000 tons of coal per annum. According to a report by Vice Consul Richard P. Momsen, dated March 12, 1918, in Rio Grande do Sul the greatest activity is seen at the Sao Jeronymo mines. At present two shafts are open and in operation, of which the oldest (Fraternidade) produces from 300 188 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. to 350 tons daily, while the newer mine (Concordia) with a con- stantly increasing tonnage was yielding 270 tons daily in January. The average daily production of the two mines in March, 1918, was about 650 tons per day. A third shaft was then being sunk, which should increase the daily production to between 1,000 and 1,200 tons. Being high in volatile matter, this coal produces good gas and salable coke for the city of Pelotas. Orders have been placed for com- pressed-air drills to increase the production. At Jacuhy the mine reached a depth of 60 meters in January, 1918, and it was expected that by July the production would reach between 6,000 and 12,000 tons per month, to be increased still further by the end of the year. The company expects to be- able to offer its coal at sufficiently low prices to compete with foreign coal after the war. In the Jaguarao Eiver valley near Eio Negro, Candiota, and Santa Bosa coal operations are being initiated. This coal is sold at from 15 to 20 milreis (about $3.75 to $5) per ton at the place of extraction, while that of the Sao Jeronymo mines is bringing 60 milreis (about $15) per ton after having been transported from the mines to Pelotas and the port of Eio Grande. The latter is a deep-mined coal, while the former is said to be a surface coal and of poorer quality. In the valley of the Jacuhy Eiver there is abundant evidence of outcroppings which promise further discoveries of new deposits. The principal coal fields in the State of Santa Catharina, Vice Consul Momsen says, are in the valleys of the Tuberao, Mao-Luzia, Eonco d'Agua, and Urussanga Eivers. The firm of Lage Irmaos, in the Tuberao District, is rapidly developing its properties, but is handicapped in railroad construction by lack of rails. The daily production varies from 60 to 70 tons and is chiefly transported by oxen. With sufficient railroad facilities the production of these mines should be from 300 to 400 tons per day. At Barra Branco, Ponte Alto, and Crissiuma operations are steadily progressing, but the chief obstacle is lack of transportation facilities. At the latter mine special care is taken to free the coal from impurities under the direction of the eminent engineer, David Draper, whose name is associated with the African diamond discoveries. In other parts of the State surveys of coal deposits are being made ; and if the war and the present freight stringencies continue, making British and Ameri- can coal not only expensive but practically unobtainable, the Bra- zilian coal industry will have received sufficient impulse to have cre- ated another permanent domestic source of wealth, and it will, partly at least, have a tendency to alleviate the fuel shortage, which has to a great extent impeded the progress and expansion of the manufac- turing industries of the country. The principal difficulty in extend- ing the use of Brazilian coal is inadequate water transportation and the high cost of hauling by either overland or water routes. Vice Consul Momsen is informed that the Viagao Ferrea Eio Grande do Sul Eailway is burning Brazilian coal in its locomotives — mixed with wood. It appears that this company has just made a contract for 24,000 tons of native coal for the current year. Brazilian engineers have always been hopeful that discoveries of iron deposits sufficiently near the coal-bearing areas to permit the establishment of an iron and steel industry in the country might be made. Thus far investigations have not revealed any discoveries of sufficient importance to indicate the possibility of coordinating these South America — brazil. 189 two mining operations. The rich deposits of iron ore found in un- limited quantities in the State of Minas Geraes are, at least under present transportation conditions, too far from the sources of coal to make possible a practical Utilization of these minerals in an exten- sive iron and steel industry in Brazil. The Government is fully alive to the coal situation in Brazil and is lending its aid to the development of the mineral beds. Recently the President authorized the construction of a railway to develop im- portant coal fields and authorized the Government to raise approxi- mately $7,500,000 of 5 per cent bonds with which to aid coal com- panies by subscribing to their capital obligations. It was also agreed to exempt such companies from customs duties, grant reduced rates on State railways, etc. It is claimed that the results of analysis of briquettes made from Santa Catharina coal indicate that the caloric value is little less than that of Welsh patent fuel. A large amount of this fuel is used by the Lloyd Brasileiro and other steamship lines (including the Japanese Line), by railways, mills, etc. A small amount is annually exported to Argentina and Uruguay. PLATINUM. Platinum has been discovered in several localities in the Republic, including the States of Pernambuco, Parahyba do Norte, and Minas Geraes, existing in gold-bearing quartz among crystalline schists, in the alluvium of rivers, and elsewhere. NICKEL. Nickel has been located in Santa Catharina, Rio Grande do Sul, and Minas Geraes (at Ayurvuca). Thus far little or no develop- ment has been carried on, but it is claimed that the ore beds are of sufficient size and importance to warrant an exhaustive investigation. The deposit in Rio Grande do Sul is located near Sao Luiz. salt. Salt exists in the State of Rio Grande do Norte, in Macao and Mossoro. This salt is shipped to various sections of the Republic. There is a small salt works at Cabo Frio, in the State of Rio de Janeiro, the products of which are used locally. Salt pans also exist in the State of Minas, and, it is stated, the industry is capable of con siderable development. The production of the various salt deposits is only a fraction of what might be obtained, and the Republic is at present a large importer of the product. MONAZITIC SANDS. Brazil contains probably a larger quantity of monazitic sands than all the rest of the world. Formerly Austria, and later Germany, were large purchasers of sand, the latter in 1910 importing 15,665 tons, valued at approximately $1,000,000. The deposits extend along the coast northward from Rio de Janeiro and are also found on the banks of various rivers, in the States of Bahia, Rio de Janeiro, Minas Geraes, and Espirito Santo. The product is used largely in the manufacture of gas mantles (incandescent) and has considerable value. The thorium that the sands contain and that is used in the 190 INVESTMENTS IN LATIN AMERICA AND BKITISH WEST INDIES. gas-mantle industry is extracted before exportation, several factories existing in the Republic for this purpose. The percentage of the thorium in the sands is about 1 to 50. Some deposits of this sand have been found from which as high an average as 5.72 per cent of the thorium has been obtained. In the event that other uses than the manufacture of gas mantles should be found for the monazitic sands, the product would doubtless greatly increase in value. GEAPHITE. Graphite occurs in several Brazilian States, principally, however, in Minas Geraes and Bahia. A number of deposits have been lo- cated, many of which are at present inaccessible, owing to lack of transportation facilities. A deposit existing at Sao Fidelis, State of Rio de Janeiro, is being worked extensively and the product used by a pencil factory located at Bio de Janeiro. One or two other de- posits are also being worked in a small way, the product being used wholly in local markets. The industry will probably expand con- siderably in the future, following the improvement in transportation facilities. OTHER MINERALS AND PRECIOUS STONES. In addition to the various minerals heretofore described, the vast Republic of Brazil is a storehouse of numerous other varieties of minerals and precious stones. Among these may be briefly men- tioned the following : Asbestos. — Exists in the Serra da Estrella, in the State of Rio de Janeiro, in the State of Bahia, and elsewhere in the Republic. Antimony and tin. — Small quantities of these minerals have been discovered in the Republic, stream tin existing in a concentrated form in the Paraopeba River, State of Minas Geraes. Bismuth. — Exists in the State of Rio Grande do Sul. Barium. — Found in various localities in the State of Minas Geraes. Cinnabar. — Has been discovered in various sections of the State of Minas Geraes, although not in large quantities. Emery. — This has been found in various places in the State of Sao Paulo, the largest and most important deposit being located at Matta do Paiol, a station on the Sorocabana. Railway, about 35 miles . from the city of Sao Paulo. Kaolin. — A number of large deposits of kaolin have been located, principally in the States of Rio Grande do Sul, Rio de Janeiro, Bahia, and Minas Geraes. A quantity of the product shipped from Rio Grande do Sul to Limoges, in France, was pronounced equal to the best obtained from Japan, and there are prospects that this deposit will be extensively developed and porcelain ware manu- factured in Brazil. At last accounts this property was held by French interests. At Vassouras, a station in the State of Rio de Janeiro, a quantity of kaolin exists, one mass alone containing 200.000 tons. Marble. — Exists in the States of Rio de Janeiro, Minas Geraes, Sao Paulo. Parana, and elsewhere ; 'is quarried extensively in Minas, the colors being white, rose, and onyx. Green, rose, and pure white are the prevailing colors in Parana. Mica.— Goyaz, Minas, Bahia, Sao Paulo, and Rio de Janeiro each contain deposits of mica — some extensive. A small quantity is usu- SOUTH AMERICA — BRAZIL. 191 ally exported, mostly from Santa Lucia de Carangola, State of Minas. That found in the State of Goyaz is considered of the best quailty. Molybdenite. — Variously located; principally in Parana. Saltpeter. — Found in small quantities in Minas Geraes and Sao Paulo. The Brazilian deposits are not likely to attain commercial importance. Silver and silver-lead. — In the State of Sao Paulo lead has been located and its quality tested. About 500 grams of silver were ob- tained from 100 kilos of lead in certain samples. Experiments on the average quartz showed 50.4 per cent lead and 0.595 per cent silver. These experiments were made at Apiahy. Other deposits exist at Iporanga, in the same State, and elsewhere in the Republic. Silver ore has been discovered in the mountains of the State of Parana. Soapstone and talc. — These exist in the State of Minas and else- where and have been exploited for local use to a considerable extent. Wolfram. — Found in fair quantities in Rio Grande do Sul (at En- crusilhada). The proportion of tungstic acid obtained in the quartz is said to be about 40 per cent. Among the precious and semiprecious stones, other than diamonds, found in various parts of Brazil there may be mentioned garnets, opals, pearls, rock crystals, rubies, sapphires, topazes, and tourma- lines. One or two emeralds have been discovered, but there are no evidences of any quantities existing. The garnets that have been obtained are usually small in size, rarely exceeding a few carats in weight Opals are also generally small and are of no great value; they are found in Minas Geraes. Many fine pearls have been dis- covered in the numerous rivers of the Republic, but no systematic attempt has been made to obtain them. The largest number thus far obtained have been found in the Araguaya River, in Goyaz; these are mostly small fresh-water pearls of various colors. Rock crystal, which can hardly be classed as a " precious stone," is quite common in Brazil, and before the war was exported in fair quantities, mostly to Germany. Its local pre-war market value was about 50 cents a pound. Rubies are exceedingly rare, and probably not more than a dozen gems of good quality have thus far been obtained. Ruby corundum of a massive form is found in Sao Paulo. The topaz industry was once of some importance in Brazil, but has been continuously on the decline for the past quarter of a cen- tury and is now of little importance. At Rodrigo Silva, near Ouro Preto, a mine was worked during recent years, and in 1912 about 200 kilos of stones were obtained, scarcely any of which were flawless. The depth of the shaft at this time is about 100 feet. Numerous additional finds of the gems have been made in various localities, including the Ilha Grande, near Rio de Janeiro, at Olinda in Per- nambuco, in Rio Grande do Sul, in the Tibagy River, State of Parana, and elsewhere. Tourmalines exist in the northeastern part of the State of Minas and have been systematically mined and exported during the past 15 years. Most of the trade in these stones has in the past been handled by Germans. The stones are frequently found in cascalho in the forest regions, generally at a depth of 2 to 3 feet below the surface. They are valuable and prior to the war enjoyed a fair market in 192 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Europe. Large clear gems were quoted a few years ago at $500 a kilo and small stones as high as $200 a kilo. Sapphires are found in fair quantities but, as a rule, are not of superior quality. In addition to the gems and valuable stones and crystals heretofore mentioned, there are numerous other varieties, more or less valuable, existing within the Republic. There is ho question that Brazil is a treasure house of developed and undeveloped (mostly the latter) mineral wealth. As has been shown, the State of Minas Geraes has taken the lead in the mining industry and contains within its boundaries almost eVery known variety of ores and gems. There are said to be good openings for well-organized and honestly and efficiently managed mining com- panies provided with sufficient working capital and having an under- standing of local conditions. A very large proportion of the river gravels in the mineral zones have been either only partly explored or totally unexplored and are believed to contain enough gold to warrant the hope of substantial returns from dredging enterprises. The laws of the Repubic governing mines and mining are just and equitable, and the Government is willing to lend its aid and give encouragement to the industry. PETROLEUM DEPOSITS. Petroleum is known to exist in the Eepublic of Brazil, but whether or not in commercial quantities is a problem remaining to be solved^ Discoveries of oil have been made in several States, including Sao Paulo (at Ibitinga and Taubate), Bahia, Minas, and Alagoas, and traces have been found elsewhere. It is also generally believed that the deposits existing in the southeastern section of Colombia extend into northwestern Brazil — a region, however, somewhat remote from routes of traffic. Explorations in the State of Bahia have brought to light a number of petroliferous springs, yielding small quantities of an excellent grade of oil, but thus far no active development has taken place. Concerning oil in Brazil, Mr. Ealph Arnold, in a paper entitled " Conservation of the Oil and Gas Eesources of the Americas," in Economic Geology (1916), says: The oil shales are of Eocene age and extend intermittently from Porto Alegre (on the south) along the coast for over 1,200 miles, nearly to the mouth of the Amazon. Portions of the shales suitable for distillation have been re- ported at the following, among other, localities : North of Ilheos, on the Itahipe River ; on the island of Joao Thanis, in the Marahu River, 80 miles south of Bahia ; on Tinhara Island, 30 miles south of Bahia ; at Riachadoce and Cama Rajibe, 25 and 45 miles, respectively, north of Maceio ; in the Province of Alagoas; and in the Sierra.de Araripe, in the State of Ceara. . Various geologists have given their opinions concerning the extent of the possible oil wealth of Brazil. These opinions have differed widely. As stated, little is known concerning the possible future of the industry, although much is hoped for. AGRICULTURE. COFFEE. Coffee is by far the most important crop and the chief source of wealth of southern Brazil. It is grown over Vast areas of the States of Sao Paulo, Rio de Janeiro, Minas Geraes, and Espirito Santo. SOUTH AMERICA BRAZIL. 193 There are, it was recently stated, 1,400,000,000 coffee trees in the Re- public, of which 750,000,000 are in the State of Sao Paulo. The total number of farms in Sao Paulo planted with coffee trees is estimated at 60,500. Probably more than $1,500,000,000 is invested in coffee plantations in Brazil, Sao Paulo's share of this total approaching $900,000,000. From two-thirds to three-quarters or more of the coffee consumed in the entire world is produced in Brazil, the Sao Paulo Railway carrying through Sao Paulo to Santos for shipment in 1915 no less than 13,444,756 sacks of 60 kilos (132 pounds) each, this representing almost the entire exported production of Sao Paulo and large quantities from neighboring States. The Brazilian crop for 1916-17 was estimated at 13,500,000 bags (15,742,000 in 1915-16) and that of the rest of the world at 4,500,000 bags. The coffee ex- ports of Santos for 1915 were valued at $113,424,679, and the average value for the 10 years 1906-1915 was $120,000,000. There was a slight increase in 1916 in the total value of coffee exported, the United States purchasing $65,176,310 (692,736,924 pounds) of the Santos crop for 1916 and a total of $73,541,315 worth from the entire Re- public. Coffee does not grow well in the northerly States of Brazil, and the approximate southern limit for its growth is the State of Santa Catharina. A recent estimate of the cost of coffee production, etc., in the State of Sao Paulo shows the following: Clearing forest land, per acre, $3.33 ; planting per 100 trees, in line, $2.50 ; care of each 100 trees during four-year period, $13; annual maintenance expenses per 100 trees, $2 to $2,25 ; cost of gathering each bushel of- coffee, $0.12 ; dry- ing per bushel, $0.03; transportation per bushel (in large quantities) $0,025. There are usually slight additional overhead costs. The above figures are, of course, subject to variations. There are numerous estates in the coffee district employing large amounts of machinery and representing considerable investments. A good many joint stock companies are engaged in the industry, some of these being foreign. Among the foreign corporations may be mentioned the Dumont Coffee Co. (Ltd.), a British concern reg- istered in 1896. This company, whose properties are located in the State of Sao Paulo, has an authorized capitalization of £800,000, in shares of £10 each, one-half being \\ per cent cumulative preference shares and one-half ordinary shares. There are also outstanding £342,100 of an authorized £400,000 5| per cent debentures, principal repayable in 1920, interest payable January and July, and subject to sinking-fund drawings up to 115. In 1910 a 25 per cent dividend was declared on the preference shares, liquidating all arrears, and full preference dividends have since been paid. In 1911, 20 per cent was paid on the ordinary shares; in 1912, 15 per cent; in 1913, 3 per cent; none since. The company has a reserve fund of £130,000. Figures for 1917 follow: Net profits, £40,452; brought forward, £48,919 ; total, £89,371 ; interest, £21,021 ; preference shares dividend, £30,000; carried forward, £38,350. In January, 1918, the' ordinary shares were quoted at 6f (high since 1911, 16£), preference shares at 9£ (high since 1911, 12^), and debentures at 94 (high since 1911, 108). The Sao Paulo Coffee Estates (Ltd.) is another British public company in the field. Its capitalization consists of £120,000 prefer- ence shares of £5 par and £150,000 deferred shares of £10 par. There 63018°— 18 13 194 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. are also two small debenture issues, one of 5£ per cent interest, of which approximately £39,000 remained outstanding in 1916 (original issue £160,000), and £18,100 5£ per cent Santa Ernestina debentures. The preference shares receive dividends of 7 per cent per annum cum- ulative, in addition to which they are entitled to share with the de- ferred shares to the extent of one-half the profits remaining after 7 per cent has been paid on the deferred shares. During recent years the following dividends have been paid: 1905, 6 per cent on prefer- ence; 1906, 8 per cent (including 1 per cent back dividend) ; 1907, none; 1908 and 1909, 7 per cent annually on preference; 1910, 24£ per cent on preference; 1911, 14 per cent, completing payments of all overdue dividends; 1912, 18| per cent on preference and 16 per cent on deferred shares; 1913, 7 per cent on preference; 1914, none; 1915 to 1917, 7 per cent on preference. The preference shares (£5 par) were quoted at 4J in January, 1918, as compared with 7$, the high since 1911. The Agua Santa Coffee Co., a British corporation, registered 1913, owns an estate in the Mattao district of the State of Sao Paulo, covering an area of 3,540 acres, of which 2,200 acres had been planted with 630,000 coffee trees when acquired. The authorized capitalization is £150,500, all issued, consisting of £75,000 7 per cent cumulative preference shares, which are entitled also to 25 per cent of the profits after 7 per cent has been paid on the ordinary shares ; £75,000 ordinary shares, both issues of £1 par; also £500 in deferred shares of Is. each. This last-mentioned class of stock is entitled to 25 per cent of the remaining profits after 7 per cent has been paid on the preference and the ordinary shares. Dividends have been paid by the company as follows: 1913, 7 per cent on the preference and 3 per cent on the ordinary ; 1914, 3| per cent on the preference ; 1915, 10^ per cent on the preference and 2£ per cent on the ordinary ; 1916 and 1917, 7 per cent each on the preference, also 2.58 per cent and 2$ per cent on the ordinary. The £1 ordinary shares were quoted in January, 1918, at 9s. 6d., the preference shares at 17s. 3d., and the deferred at Is. 6d. CACAO. Brazil, in the year 1915, stood second among the nations of the world as a producer of cacao. The crop produced during that year was 46,260 tons, or 15.9 of the world's total production (Gold Coast, Africa, 77,278 tons, or 44.4 per cent) . Of this total, 41,546 tons were exported from Bahia, which is the principal producing State in the Eepublic. The 1916 crop exported from Bahia was 37,481 tons. The 1917 crop was estimated to equal that of 1915. There are stated to be very large areas in Brazil still available for the growing of cacao. The various States of the Republic stretching from the Amazon southward to northern Sao Paulo and Matto Grosso grow more or less cacao, that raised in Maranhao being re- garded as the finest. It is claimed that the industry offers good op- portunity for the profitable investment of moderate amounts of capital and will probably continue to do so for some time. Planta- tions yield anywhere from 5 to 13 pounds per tree, cases having been known where 20 pounds per tree were secured. It is claimed that one person may take care of as many as 1,000 trees. The export and other duties and taxes are moderate. A prewar estimate stated that SOUTH AMERICA — BBAZIL. 195 each plantation would cost $0.80 to $0.85 per tree and that in Bahia there were from 8,000,000 to 10,000,000 trees. Trees are generally planted about 300 to the acre and are usually grown on land 4 or 5 miles from the sea or farther, plantations extending inland into the mountain ranges. A somewhat humid climate is best suited for their growth. BEANS. Beans are grown in large quantities in Brazil, but until recently were almost wholly consumed at home. During the past year or two the country has exported them. The crop for 1916 in Rio Grande do Sul was valued at more than $4,000,000 and in other States consider- ably exceeded that figure. The crop in Sao Paulo for 1916 was about 2,600,000 sacks of 132 pounds. RUBBER. The rubber industry of Brazil, despite all that has happened dur- ing the past three or four years, ranks second in importance to the raising and exporting of coffee. The exports of this product during 1916, 31,495 tons, were valued at $36,537,475, as compared with $33,- 946,432 in 1915, $33,521,504 in 1914, and approximately $80,000,000 in 1912. Much has been written during recent years concerning this subject, and the phenomenal rise in the price of the products to dizzy heights, to be followed shortly by an equally spectacular crash, is now a matter of history. As is generally known, very little plantation rub- ber has been grown in Brazil, and owing to the more or less wasteful methods employed in tapping the trees of the Amazon basin, the high cost of supplies and materials, and the scarcity of labor, the Brazil- ian rubber merchant has found it difficult to compete successfully with the plantations of the East. It has been pointed oiit that the high export duties tend to check the recovery of this industry. While this is partly true, it should be borne in mind that these export duties form the principal sources of revenue for the State of Para and adjacent territories, and unless some other means of raising revenue can be found it will be almost impossible to reduce them materially. Every endeavor is being made to encourage the establishment of rubber plantations in the Bepublic, and the Government is lending aid to the industry and studying up-to-date methods. In the Amazon district, where the best quality of rubber is found, there is no great amount of cleared land and most of the district is more or less sub- ject to floods. The half-civilized Indians of the territory, although able and willing to gather wild rubber, are not inclined to work on plantations and do not make good laborers. Therefore the problem of obtaining sufficient hands to take care of the rubber trees is not an easy one to solve. There are, however, a few plantations on the coastal lands, and progress is being noted. The quality of the Para rubber is too well known to require more than passing comment, and the industry seems almost certain to come into its own again. The wasteful methods which, as stated, have been employed by many of the rubber gatherers in obtaining the wild rubber have made it necessary for these men to seek sources of supply each year at points higher up the river and its tributaries and have thus added greatly to 196 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. the cost of production. Nevertheless, there are still vast untapped areas and, thanks to a partial rally in the market price of the com- modity, there are signs of some improvement. The men employed in gathering rubber in the forests have fre- quently numbered 15,000 to 20,000. It was estimated during the days of good prices that these laborers, if successful, would frequently clear from $500 to $600 per year, and in some cases as much as $1,000. TOBACCO. The State of Bahia is the principal center of the tobacco-raising industry, although the product grows freely in almost every State in the Republic. Despite the large amount grown for home con- sumption, exports for 1916 reached the respectable total of $7,277,378 (21,293 tons), of which $167,399 went to the United States, this total comparing with $5,656,305 in 1915 and $6,957,542 in 1914. For- merly Germany took most of the Brazilian tobacco. It is said that the tobacco industry of Brazil had its origin before the coming of the white man and that for centuries it has been raised in large quantities. It has been estimated that a plantation of 150,000 square meters requires an annual outlay of £1,580 and earns approximately £2,120 each year. COCONUTS AND COPRA— OIL NUTS— VEGETABLE IVORY. The coconut is found in practically all parts of Brazil, but is not a product of great commercial importance in the southern sections of the country. There are vast areas in the Republic well adapted for its growth, and the industry should expand greatly in the future. A report submitted August 5, 1917, by United States Consul A. T. Haeberle, who is stationed at Pernambuco, contains data gathered by Mr. A. J. Brooks, an American engineer, who made a trip to Bra- zil to study the industry and who traveled extensively through dis- tricts suitable for the growth of the nuts. The report follows: The coconut zone of Brazil fringes the coast from Parahyba on the north to Bahia on the south. This zone is spotted with coconut groves varying in size from a few hundred trees to 40,000. The total number of bearing trees ap- proximates 1,250,000. The annual yield per tree is 40, or a total annual pro- duction of 50,000,000 nuts. The average size of the nuts compares well with the products of other tropical countries, 5,000 nuts being required per ton of copra. There are three ports from which to ship coconuts — Cabedello, Recife (Per- nambuco), and Maceio. About three-fourths of the coconut trees are concen- trated around Cabedello and Macei6. The price paid on the plantation for nuts varies with their size and their dis- tance from the cities. The largest nuts command $35 per thousand, while the smaller ones are sold for $25 per thousand. The average selling price on the city market is $42.50 per thousand. No attempt beyond the experimental stage has been made to produce copra. The reason for this is the result of local conditions, namely, the limited num- ber of available coconuts and the native's fondness for the nut as a table deli- cacy. With copra selling in New York at $160 a ton and freight averaging $10 a ton, the plantation owner profits 1 cent more on every coconut he sells on the local market than if he had turned that coconut into copra. This state- ment does not mean that copra can not be produced here at a profit. On the contrary, there is excellent opportunity for capital to operate a coconut grove and sell copra at a large margin of profit if a working organization were effected, if the other products of the tree were utilized, and if the available space were cultivated with catch crops. The possibilities of the coconut industry in Brazil are tremendous. The annual yield of the trees at present is 40 nuts per tree, despite the fact that SOUTH AMEEICA — BRAZIL. 197 many of the trees are robbed of their fruit before the meat begins to form, to be sold upon the local market for their milk. This practice has appreciably lowered the vitality of the trees. Seed selection has been almost entirely neglected, and fertilization is a science never practiced. improper spacing is another existing evil that contributes to the retarding forces so prevalent in the Brazilian coconut groves. This is strikingly depicted in the case of two adjoining groves of the same age — one planted with 75 trees to the acre and the other with 130 trees. The annual yield of the former is four times that of the latter. Disease and pests are almost unknown. Labor is cheap. The possibilities of disposing of the by-products are excellent. The fiber would find a waiting market in the form of cord or rope because of the absence of a cord factory here ; the husk would sell readily for fuel ; the milk is always sought by the native for his familiar breakfast food, the " cuscoos " ; and the palm leaves are eagerly bought by the natives for building purposes. An estimate of the cost of developing 2,000 acres of coconut land in Brazil would read about as follows: Based on an average of 75 trees per acre, the total number of trees on the plantation would be 150,000 ; average yield of nuts per tree, 75 ; total annual yield of nuts, 11,250,000 ; copra capacity in tons per month, 175. The expenditures until the plantation reached full bearing would approximate : First year. — Rent, $500; seed ($28 per 1,000 nuts), $4,200; buildings, $500; tools, $2,000; clearing, planting, etc. (80 men at 25 cents a day), $7,000; salaries, $5,000 ; contingencies, $2,000 ; total, $21,200. Second, third, fourth, and fifth years. — General maintenance, including rent, salaries, and catch-crop cultivation, $8,300 per year, or $33,200 in all. Sixth year (first yield). — Plant for copra manufacture, $6,000; picking and collecting, $15,000; husking, $15,000; cost of making copra, $30,000; freight, Pernambuco to New York (50 per cent in excess of normal), $13,500; general maintenance, $8,300 ; contingencies, $4,000 ; total, $91,800. Seventh year (first full yield). — Picking and collecting, $20,000; husking, $20,000; cost of making copra, $60,000; freight, Pernambuco to New York, $27,000 ; general maintenance, $10,000 ; contingencies, $4,000 ; total, $141,000. The credit side of the account would show the following entries : First year. — Returns from catch crops, average $2 per acre, $4,000. Second, third, fourth, and fifth years. — Returns from catch crops, average $5 per acre, $10,000 a year, or a total of $40,000. Sixth year (first yield). — Based on an average yield of 40 nuts per tree, the total would be 6,000,000 nuts, which would produce 1,000 tons of copra and 500 tons of coconut fiber or coir, and would be worth : Copra, 1,000 tons at $125 a ton, $125,000 ; fiber, 500 tons at $40 a ton, $20,000 ; catch crops, $10,000 ; Gov- ernment aid, $10,000 ; total, $165,000. Seventh year (first full yield).— Copra, 2,000 tons at $125 a ton, $250,000; fiber, 1,000 tons at $40 a ton, $40,000 ; Government aid, $10,000 ; total, $300,000. At the end of the seventh year the plantation account would stand thus: Year. Expendi- tures. Revenues. Excess ex- penditure. Excess revenues. First Second Third Fourth Fifth Sixth (first yield) Seventh (first full yield) Total $21, 200 8,300 8,300 8,300 8,300 91,800 141, 000 $4,000 10,000 10,000 10,000 10,000 165,000 300,000 $17,200 $1,700 1,700 1,700 1,700 73,200 159,000 287, 200 509, 000 17,200 239,000 ' This gives a net return for seven years of $221,800, or an average of $31,685 a year. On a capital of $30,000 this would mean an average annual return of 105 per cent. 198 INVESTMENTS IN LATIN AMERICA AND BBITTSH WEST- INDIES. The $10,000 yearly Government revenue referred to above is ex- pected State aid to be paid under a bounty provision set forth in the South American Year Book for 1915, page 243, which reads : Cultivation of coconut palm (bounties). — The Brazilian Ministry of Agricul- ture has entered into a contract with Messrs. Octaviano Machado and Andre Christophe with a view to encouraging the systematic cultivation of coconut palms and the exportation of copra. Certain bounties are to be granted to the above-mentioned firm upon the following conditions : A report is to be presented to the Ministry before the end of the year giving full details as to the actual area under palm cultivation, the variety of palm planted, and the methods of cultivation adopted. A copra plant is to be established within two years to deal with the product of at least 3,000 hectares (7,400 acres) of coconut planta- tions. The Ministry of Agriculture will endeavor to obtain duty-free admis- sion of all machinery necessary for the undertaking, and also the granting of a premium, for five years, of 30 reis per kilo (about one-half cent per pound) of copra exported, and 60 reis per kilo (about 1 cent per pound) of coconut oil ex- ported, up to a maximum amount of $10,000 per annum. Similar terms may be extended to any other applicant at the discretion of the Government. The Brazil nut is a product of considerable commercial importance. Exports for 1916 amounted to $1,722,114, as compared with $980,009 in 1915 and $2,280,275 in 1914. The trees from which the nuts are gathered often attain a height of 150 feet and a considerable girth. Most of these nuts come from the State of Para and are shipped from the port of Para (Belem). Babassu nuts are exported from Brazil to the amount of several thousand tons annually, and the quantity should be considerably in- creased after the war. Most of these are exported from Bahia. These nuts yield a high percentage of oil not unlike that produced from the coconut. Another somewhat similar nut is one variously known as the souari, pekea, or butter nut, which is found also in the Guianas and Peru. The nut brings a good price and has excellent commercial possibilities, partly because of its edible qualities and partly on ac- count of the fat that it contains, there being said to be a larger pro- portion in this nut than in any other known species. Experiments are being made as to the possibilities of cultivating this product, and it is believed that plantations of the trees would prove more profit- able than an investment in coconuts requiring equal capital. Vegetable ivory is also obtained in Brazil and exported in fair quantities. These nuts are produced by the piassava palm and are used for the making of buttons, beads, etc. CARNAUBA WAX. Carnauba wax, which is not unlike beeswax, is found in nearly all of the northern States and is of considerable commercial value. In addition to the wax, which forms an undercoating for the leaves of the tree, the roots and other parts are used for various purposes. During 1916 the exports of this product amounted to 4,167 tons, valued at $1,914,454, as compared with 5,897 tons, valued at $2,- 399,033, in 1915. In addition, large amounts of the products of this tree are used in the local markets, and the industry has generally as- sumed considerable importance. There are more than 1,000,000 of these trees in the State of Ceara, where they thrive well, and almost equal numbers in other States. SUGAR. The sugar plantations of Brazil are attaining considerable impor- tance, a vast increase being shown in the value of the amount an- SOUTH AMERICA BRAZIL. 199 nually exported. There are a good many sugar mills in the Republic, although only a few use up-to-date machinery. During three recent years the exports of sugar have been as follows: 1914, 31,860 tons, $1,69,0,916; 1915, 59,074 tons, $3,607,452; 1916, 53,825 tons, $6,136,542. The exports of sugar in 1909 amounted to 70,208 tons. Uruguay, Argentina, Great Britain, the United States, and Por- tugal are the principal customers for the sugar. The total output of sugar for 1916, including that consumed locally, has been esti- mated at 300,000 tons. Of the sugar exported in 1916, $3,449,405 worth was cleared from Pernambuco and Maceio. The exports through Bahia totaled 15,880 tons, valued at approximately* $1,800,000. The principal seats of sugar cultivation are the coastal lands and the interior districts, extending from the district adjacent to the port of Natal as far south as Sao Paulo. Although not so successful in the southern States of Brazil, sugar cane is raised as far down the coast as Rio Grande do Sul, in which State the 1916 crop was estimated to be worth about $3,000,000. There is much criticism concerning the fact that the planters are so often taking advantage of the fertility of the soil and working crop after crop without fertilizing or taking proper precautions to prevent its becoming poor in quality. Such conditions are, however, not wholly limited to Brazil, as a tour of sugar-producing countries will indicate. It is claimed that Brazil is better adapted for sugar raising than any other country in the world and that the industry is destined to expand considerably in the future. The yield of sugar per acre in the States of Rio de Janeiro and Sao Paulo averages, it is stated, 20 tons and upwards, the proportion of sugar in the cane averaging slightly more than that attained in Cuba. The results obtained are excellent but could be improved if more modern machinery were available. In the northerly States the cane ripens generally in about 15 months, and south of Rio de Jan- eiro in about 18 to 20 months. Although sugar is exported in con- siderable quantities, the high price in the local market indicates that there is no overproduction. It. is frequently stated in Brazil that foreign capital could scarcely be more profitably invested than in sugar plantations equipped with modern mills and machinery and properly managed. OTHER CROPS. Space will not permit an exhaustive discussion concerning oppor- tunities in other branches of agriculture, fruit growing, etc. Among the other crops of the Republic, cotton would rank first in impor- tance. During the blockade days of the American Civil War the industry flourished. Following the return of normal conditions in the United States the production decreased considerably, but in recent years has advanced greatly owing to the establishment of numerous mills for the manufacture of cotton goods (see p. 209). The exports of the product for 1914 totaled $8,332,812; 1915, $1,374,- 159; and 1916, $575,991. The decrease in exports does net prove that the production is declining. Instead, far larger quantities are being used locally owing to the growing importance of the cotton-milling industry. 200 INVESTMENTS IN LATIN AMERICA ANI> BRITISH WEST INDIES. Concerning the cotton industry and its future, an article that re- cently appeared in the London Times contained the following inter- esting information: From a casual glance at recent statistics it would appear that the cptton- growing industry of Brazil was on the down grade, but this is very far from being the case. The all-sufficient explanation of the decrease in the quantity ex- ported is the fact that the fiber is now being manufactured in the country itself, and in this way it may prove that the war has been of the very greatest value to Brazil in introducing the capital, enterprise, and technical skill neces- sary to improve its home manufactures. The present development of the cotton industries is one of the most important factors in the future of the country. There is every promise of great success and ample scope for enterprise and capital. It would be a great benefit, not only to Brazil but to the world, if more atten- tion were devoted to the production of cotton in Brazil. There is grave reason to anticipate that the world's cotton crop may prove insufficient for its needs in the near future. In Egypt and in the United States the cultivator has always to choose between cotton and wheat. With the increasing demand and higher price for wheat it becomes evident that the cotton crop is rikely to be restricted. The Ministry of Agriculture has been endeavoring of late to introduce more practical methods in the cultivation of a plant for the growth of which such favorable conditions exist in the northern States. Formerly the cottons of North Brazil were looked upon in Manchester as some of the finest in the market. Latterly they have fallen away. " This decadence," wrote the Minister of Agriculture, " was due to ignorance of the proper methods of planting, to the lack of selected seeds, to failure to cultivate from seed of different varieties in order to prevent degeneration of the plant, to bad methods of opening the pods, and to the complete absence of regular preparation of the fiber, which was constantly damaged by the use of antiquated machinery or by the unskillfulness of the operators." In 1912 the Government sent a delegate on a tour of inspection through the chief cotton-producing countries with the object of studying the most modern methods employed in the cultivation, harvesting, and preparation of the plant. It also set up an experimental station for the intensive cultivation of cotton in the State of Maranhao. A contract was signed in May, 1913, between the Minister of Agriculture and Dr. Pedro de Godinho, by which the latter agreed to establish demonstration <*amps all over the cotton districts, presided over by competent experts. Rice is becoming an important crop. Only a few years ago large quantities were imported. To-day the balance has swung to the export side, and the Republic is becoming one of the great centers of production. Herva mate, known as yerba mate in Spanish-speaking countries, is also raised in large quantities and a large proportion exported. The total exports of the product in 1916 amounted to $8,909,166, most of which went to Argentina and Uruguay. Only $236 worth of the product went to the United States, as the matte has not as yet come into general use in this country. MISCELLANEOUS AGRICULTURAL DATA. All of the Brazilian States contain more or less extensive agricul- tural areas, and there remain great stretches of undeveloped terri- tory certain in the course of time to bring considerable wealth to the Republic. Notwithstanding the fact that virgin land still exists in abundance, very substantial progress has been made in many of the States. There are in Sao Paulo alone 60,500 farms, valued at up- ward of $900,000,000, covering an acreage of nearly 42,000,000, or more than 65,000 square miles. The agricultural production of these farms from 1912-13 to 1915-16 was as follows: SOUTH AMEBICA — BRAZIL. 201 Chief products. 1912-13 1913-14 1914-15 1915-16 Coffee Com 9,470,833 37,020,000 5,287,000 3,826,000 24,878 176, 900 10,080 11,072,000 30,450,000 5,286,000 4,063,000 24,369 41, 900 10,000 9,207,000 35,200,000 6,300,000 4,780,000 27,920 49, 600 9,500 12,194,000 58,000,000 dn 9,820,000 . 8,172,000 29,100 50,000 10,200 Note.— Bag of coffee weighs 132 pounds or 60 kilos; bushel contains 36.35 liters; bale weighs 500 pounds. Rio Grande do Sul, one of the richest States in the Republic, al- though only a small part is developed, produced in 1915, according to United States Consul Lee, crops of the following values : Products. Value. Products. Value. Products. Value. $38,250,000 14,260,000 4,125,000 12,487,500 6,300,000 2,050,000 3,000,000 7,965,000 $4,537,500 1,139,260 3,950,000 401,400 3,150,000 1,300,000 285,200 2,337,500 $272,250 73,750 625,000 211,000 23, 125, 000 Oats Alfalfa All other products . . Total Eye 129,835,350 Elce.. LIVE-STOCK AND MEAT INDUSTRIES. Few countries in the world offer better prospects for cattle farm- ing and for the carrying on of the meat-packing industry than Brazil. Those who have seen the enormous and wonderful cattle ranges of Rio Grande do Sul and other States of the Republic can not but be enthusiastic over the outlook for the future in this field of enter- prise. American interests have realized the opportunities existing and have taken a leading position in developing them. Some of the American companies that have entered the field have embarked in the manufacture of all kinds of by-products of the beef and have equipped their plants to handle a very large amount of business. It has been recently estimated that the number of cattle within the boundaries of Brazil would not fall short of 31,000,000, or about 3.6 per square kilometer, compared with 11 per square kilometer in Argentina and 7 per square kilometer in Uruguay. The total num- ber of cattle, as above, compares with approximately 22,000,000 in 1912. CATTLE RAISING IN RIO GRANDE DO SUL. Rio Grande do Sul has taken the lead as a cattle-producing State, but several other States are not far behind it. Efforts are being made to improve the stock through the importation of fine breeding steers, and this is beginning to show excellent results. During 1916 exports of frozen meat reached a total of 34,000 tons, valued at about $7,500,000, and these figures have been more than doubled during 1917. The total value of beef products of the State of Rio Grande do Sul for 1916 was estimated at $10,000,000, a large portion of which was shipped to Great Britain and Italy. There follows a report by United States Consul Samuel T. Lee concerning the progress of the beef and cattle industries in Rio Grande do Sul (report dated July 2, 1917) : 202 INVESTMENTS IN LATIN AMERICA AND BKITTSH WEST INDIES. The leading source, of wealth in the State of Eio Grande do Sul (the area of which is equal to twice that of Pennsylvania) is the pro- duction of xarque, or jerked beef, and such animal by-products as hides, horns, bones, tallow, lard, glue, cattle hair, wool, and sheep- skins. This is essentially a cattle region, and since first settled has sup- plied large amounts of jerked beef to other sections of Brazil and neighboring countries. The- records of this consulate indicate that as far back as 1829 small United States sailing vessels coming to this port carried on an active trade in dry cattle hides. There has never been a market in the United States for jerked beef, however, and this article has been sold mostly to other States of Brazil and to Cuba. The increasing problem of the future meat supply of the world is bringing southern Brazil into prominence as one of the few remain- ing and only partly developed tracts of good range land in North or South America for the raising of beef cattle on a large scale on open ranches. Although this district is completely within the South Temperate Zone, no winter feeding of range cattle is required. This territory is practically free from cattle diseases and in the near future will be a large producer of frozen meats for consumption in the United States. Large American meat packers have acquired important holdings in Kio Grande do Sul at Livramento, Eosario, Eio Grande, and other places. Modern refrigerating plants are being constructed at Livra- mento and Eio Grande, and gradually many of the numerous jerked- beef plants (saladeros or xarqueadas) elsewhere will be transformed into modern establishments. The cattlemen are aware of the chang- ing conditions and demands, and are improving their herds by the introduction of high-grade stock. The number of cattle in Eio Grande do Sul has gradually increased until the total for the entire State was officially reported to be 8,057,062 on December 31, 1916; in 1908 the number was 6,199,410; in 1910, 6,574,954; in 1912, 7,023,209; in 1914, 7,529,702; and in 1915, 7,917,298. On December 31, 1916, the official statistics show the num- ber of other live stock in this State as follows: Sheep, 4,241,386; swine, 3,832,144; horses, 1,195,205 ; mules, 315,077; and goats, 121,128. Cattle were slaughtered in jerked-beef establishments during the years given in the following numbers: 1907, 598,080; 1910, 673,580; 1912, 804,264; 1914, 510,885; and in 1916, 457,958. The decline for the last four years is accounted for by the increasing amount of canned beef produced. It is estimated that between 350,000 and 400,000 head are killed each year for domestic consumption. • The following table shows the value of the jerked beef, or xarque, produced from 1907 to 1916 : Years. Exported from State. For local consump- tion. Total. Years. Exported Irom State. For local consump- tion. Total. $5,741,489 6,337,612 6,227,188 6,096,829 6,578,282 $1,014,281 807, 126 936,362 1,171,797 1,465,277 $6,755,770 7,144,738 7,163,550 7,268,626 8,043,659 1912 57,885,048 7,937,816 5,928,224 6,994,052 7,374,410 $1,302,253 675,034 2,286,212 2,257,821 2,908,044 $9,187,301 8,612,850 ■8,214,436 9,251,873 10,282,454 1908 1913 .. 1909 1914 1910 1915 1911 1916 . SOUTH AMERICA BRAZIL. 203 LIVE-STOCK INDUSTRY IN SAO PAULO AND MATTO GROSSO. Further information concerning the live-stock industry of southern Brazil is given by United States Consul Charles L. Hoover (Sao Paulo, 1917) : The industry that bids fair to become the most important in the State of Sao Paulo is stock raising, especially the production of meat animals. Two packing nouses, which slaughter 300,000 cattle per year, have been established there; one is owned and operated by Americans. Another American company has purchased land in the city of Sao Paulo for a plant that will handle 1,500 head of cattle, 1,000 hogs, and 2,500 sheep daily. It is estimated that there are 2,500,000 cattle in the territory tribu- tary to Sao Paulo, although there is no way of ascertaining the exact number. The best breeding grounds for this region are located in Matto Grosso, where the cattle virtually run wild, as formerly in Texas. Each rancher holds a certain range and endeavors to keep his own cattle confined thereon and to mark them with his own brand. One American company controls several million acres and possesses about 500,000 cattle. Before the packing houses were started in Sao Paulo, the cattle on these ranges were useless except for the production of jerked beef, or xarque. For jerked beef, the leaner the animal the better, and consequently no effort was made to improve the breed until the need of it was foreseen if the herds were ever to become profitable through the location of refrigerating plants in this region, and work was begun in a systematic way. < Both the Brazilian and the Sao Paulo Governments have not only sought the types best adapted to the country, but they have encouraged the progressive ranchers to import on their own account by paying transportation costs and remitting customs duties.. As a result, a number of breeding farms have been started from which thousands of males are sent up to the range country every year, and grade cattle are now received in large numbers. Many different breeds have been tried, but it seems that whatever strain of European cattle may be selected to give body to the animal and quality to the beef, a cross with the zebu, or Indian cow, is necessary, as this animal best resists the fever and the berne fly. The zebu attains a large size, and its smooth skin produces excellent leather. From the breeding ranges in Matto Grosso the cattle are driven in large herds to the fattening pastures in the southwestern part of Minas Geraes and the northwestern part of Sao Paulo. It is the preparation of these pastures that places cattle raising on a laTge scale there beyond the reach of the man of small means. They are originally open country and the wild grass is poor in quality. Thou- sands of miles of barbed-wire fence have been constructed ; the land is plowed (disk plows pulled by tractors are frequently used), then fertilized and planted to grass. According to recent statistics there are about 2,000,000 hogs and about 300,000 sheep in Sao Paulo. An American company is engaged in the sheep-raising industry and has purchased some 15,000 ewes of native stock, which it proposes to cross with imported breeds. This company's property is located in the southern part of the State. 204 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. SHEEP AND HOGS IN BRAZIL.' In addition to the 31,000,000 cattle in the Kepublic, there are, it is estimated, 11,000,000 sheep and about 18,500,000 hogs. The number of sheep per square kilometer in Brazil, 1.25, compares with 22 in Argentina and 18 in Uruguay. There are still considerable areas of good sheep pasture land, and this branch of the live-stock industry should develop in the future. The number of hogs per square kilo- meter in Brazil is 2.16, this comparing with 0.5 in Argentina and 0.3 in Uruguay. BRITISH INTERESTS. Great Britain is interested in the Brazilian meat industry, prob- ably its largest company in the field being the Brazilian Extract of Meat & Hide Factory (Ltd.). This company holds a concession from the Brazilian Government to make meat extract following the Liebig method and owns a factory at Paredao, near Porto Alegre, that is engaged in making this product and jerked beef. The com- pany was incorporated in 1887, and its present capitalization con- sists of £21,109 shares and £23,000 debentures. The dividend pay- ments in recent years have been irregular. OPERATIONS OF BRAZIL LAND, CATTLE & PACKING CO. The Brazil Bailway, at the time of commencing operations, pur- chased through a subsidiary, the Brazil Land, Cattle & Packing Co., large areas of cattle-grazing lands. These cattle lands, the total acreage of which just prior to the receivership of the Brazil Eailway was 8,163,081, are in the States of Parana, Matto Grosso, and Minas Geraes. The company stocked these lands with fully 200,000 head of native cattle and about 1,000 pure-bred imported cattle. The lands selected were mostly well watered and, with the excep- tion of portions here and there in Matto Grosso, which were covered with valuable hardwood timber, were excellent grazing lands. Prior to the receivership the property was generally divided into ranches, a large amount of fencing was done, and necessary buildings were erected. Since the outbreak of the war the increased prices received for this company's products have aided it materially and its outlook may be said to be extremely, bright. The Brazil Land, Cattle & Packing Co. owns 77£ per cent of the shares of the Continental Products Co., the remainder being held by Wilson & Co., of the United States. The plant of the Products Co. is located near Sao Paulo and is expected to prove highly profitable. In addition to owning all of the share capital, the Brazil Railway owns 90 per cent of the Brazil Land, Cattle & Packing Co.'s out- standing bonds. REPORTS BY AMERICAN CONSUL GENERAL. Concerning the cattle industry, Consul General Alfred L. M. Gottschalk, of Rio de Janeiro, furnished under date of January 4, 1917, an interesting report. Extracts from this report are here given : Brazil to-day offers a field rich in possibilities for the cattle in- dustry. The only existing census of the herds in the Republic sets SOUTH AMERICA- — BRAZIL. 205 their total at 30,000,000, but the number is undoubtedly larger than that. It is thought in some quarters that a newer cattle census will tend to show that not only the rolling plains of southern Brazil which border upon Uruguay, Argentina, and Paraguay, but also a vastly more extensive central and tropical highland region, including the States of Matto Grosso, Goyaz, parts of Minas Geraes, and perhaps also the western portion of Sao Paulo, may prove in time to be valuable cattle ranges. In these States are vast lands still undevoted to agriculture. Frost is practically unknown there. A special pasture adapted to the Brazilian soil and climate, the caipim gordura ("fattening grass"), as it is popularly called, grows there all the year round and keeps the cattle constantly in fit condition for slaughter. South of the State of Parana the frosts, although not heavy, interfere with the growth of this grass, and the cattle therefore have their lean and fat periods. This is precisely what meat exporters do not want. The question of the relative pasture value of the various Brazilian ranges, as affected by the necessity of providing for the support of a presumably largely-increased national herd, seems most vital at present. The determination of the section of the country that is really to be the future seat of the cattle industry will decide the building of roads and the location of the most favorable exporting points. LIST OF PACKING HOUSES. In the country at present, actually in operation or projected, are the following packing houses or f rigorificos : At Ossasco, State of Sao Paulo, a joint interest of Wilson & Co. with the Brazil Railway (American). At Barretos, State of Sao Paulo, a plant capitalized and conducted by Senhor Conselheiro Prado and his associates (Brazilian). At Rio Grande do Sul, the location selected by Swift & Co., of Chicago, for the erection of its new plant (American). At Pelotas, State of Rio Grande do Sul, a project on the part of the Uniao dos Criadores (Ranchmen's Society) of the State, which has not yet taken complete form (Brazilian). At Santa Anna, State of Rio Grande do Sul (near the Uruguayan border), the probable location of a packing house to be erected soon by Armour & Co., of Chicago (American). At Mendes, State of Rio de Janeiro, on the Central Railway of Brazil, about 80 kilometers from Rio de Janeiro, a packing plant, now in the course of con- struction (some of the buildings were formerly used as a brewery), of which little is known. Mr. Vestey, of Chicago, is said to be concerned, with English partners. The plant is expected to commence slaughtering in May, 1917, and will have a capacity of 500 head per day. The interests are now represented here by Mr. F. Ellis, an English citizen. At Rio de Janeiro a chilling and freezing plant of modern type, the property of the Port Co. (one of the subsidiary companies of the Brazil Railway), which does not slaughter or use by-products, but merely chills and freezes for export the cattle slaughtered at the municipal slaughterhouse of Santa Cruz, near Rio de Janeiro (French company). Each of these companies has selected a location where it expects it will find the greatest number of cattle at the lowest price, but at the present stage of development it is difficult to prophesy as to which of these locations will eventually prove to have the most com- manding position. 206 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. MEASURES TAKEN BT STATES AND CONCESSIONS OFFEKED. Dr. Affonso A. Camargo, president of the State of Parana ? has been extending the high roads leading out from his capital, Curitiba, toward Goarapoava, so as to tap the State of Matto Grosso, and al- ready, with evident success, he has had a large drove of Matto Grosso cattle brought down on the hoof at a favorable price from Porto de Monjolli on the border of that State. He desires to have an American packing house settle in his State, and proposes, if any suitable firm approaches him with a proposition, to give it legal guaranties that the present State export duties and charges (about 4 per cent or less) shall not be increased in any way for a term of 15 years. Curitiba's port is Paranagua, which is 2£ hours distant by rail. A very fair harbor there is used by the Brazilian coastwise shipping companies (Costeira, Commercio e Navegacao, and Lloyd Brasileiro) and the Funch-Edye line of steamers out of New York, which have been bringing between 800 and 1,200 tons of American general cargo to Paranagua per month. Similar concessions were offered by Col. Felippe Schmidt, gov- ernor of the State of Santa Catharina, the port and capital of which is Florianopolis. The duties on exports in that State are even lower, generally, than in Parana, and the tendency is to do away with them altogether on many articles. In the State of Rio Grande do Sul the present acting governor, Gen. Salvador Ayres Pinheiro-Machado, has signed a bill giving to any foreign meat-packing industries that might settle in the State 30 years' exemption from export taxes of all sorts. The State, however, in obedience to the interests of its large ranch owners, finds it neces- sary to reserve to itself the right of subsidizing any purely native industry of this sort that might later develop and has already im- posed a tax of 10 milreis ($2.50 United States currency) upon every cow under 10 years of age slaughtered, in order to protect its herd from decimation by the meat-packing business. QUALITY OF CATTLE. A, question often asked by representatives of American meat- packing interests who have visited the country is: "When may we count on getting well-bred cattle here?" Men with a very consid- erable experience in the southwest of the United States, as well as in Argentina, have stated that the cattle now being slaughtered in Brazil — the ordinary native stock of the country, known as gado crioulo — compare more than favorably with Argentina's native stock of 20 years ago, before the introduction of foreign sires into Argen- tina had modified and improved the herd to its present type. Much depends upon whether or not the packing plants differentiate in favor of well-bred cattle. If the packers pay as much per kilo or per pound for a fat native steer that yields 35 per cent of first-class meat as they would pay for an improved type of animal that would yield between 55 and 60 per cent of its weight in first-class meat, just so long will the improvement of the Brazilian herd be delayed. BENEFIT FROM ADVENT OF AMERICAN PACKERS. The advent of the American meat packers into the country will naturally mean a visible economic benefit, The only thing for them SOUTH AMERICA BRAZIL. 207 to do is to prove to Brazil that they have at heart the stable founda- tion of the cattle business in the country, since they hope to be sharers in its future. From three American sources, two of which are large meat-packing establishments, the consulate general has been ap- proached with a request to offer in their names .to the Brazilian Na- tional Society of Agriculture handsome prizes to be awarded for good cross-bred stock at the cattle fair. These prizes have been gratefully accepted. SLAUGHTERING WILL NOT INVOLVE DIMINUTION OF HEED. It seems clear that the Brazilian herd will be able to stand the drain of the packing houses upon it and still not suffer numerically. Assuming the present herd to be of only 21,000,000 head in all, a cal- culation made by a recognized American authority among ranchmen in Brazil, Mr. Murdo MacKenzie, has particular interest. 1 He states : On the assumption that Brazil has only 21,000,000 cattle and no intention of increasing this number, the number of cows that could be slaughtered annually, if the cows were not allowed to remain on the pastures longer than to attain the age of 9 years, would be 881,345, and the number of 4-year-old steers for annual slaughter would be 1,422,336, making together 2,303,681. In a herd of 21,000,000 cattle, where steers are held until 4 years old before slaughtering, there should be 7,000,000 cows. From this number of cows a calf crop of 50 per cent should be obtained, thus giving 3,500,000 calves annually. Half of this number (1,750,000) would be heifers and the other half steers. Assuming these figures to be approximately correct a surplus of 881,345 cows and 1,422,336 steers would annually be disposed of. These figures are arrived at as follows : Cows — Number of heifer calves produced, 1,750,000 ; less loss as yearlings at 10 per cent, 175,000 ; loss as twos, at 7 per cent, 110,250 ; loss as threes, at 7 per cent, 102,532 ; loss as fours, at 7 per cent, 95,355 ; loss as fives, at 7 per cent, 88,680 ; loss as sixes, at 7 per cent, 82,472 ; loss as sevens, at 7 per cent, 76,699 ; loss as eights, at 7 per cent, 71,330 ; loss as nines, at 7 per cent, 66,337 ; balance, 881,345. Steers — Number of calves, 1,750,000 ; loss as yearlings, at 10 per cent, 175,000 ; loss as twos, at 5 per cent, 78,750 ; loss as threes, at 3 per cent, 44,887 ; loss as fours, at 2 per cent, 29,027; balance, 1,422,336. If we have a surplus of 2,303,681 cows and steers to dispose of annually and allow 1,000 per working day to each packing house for slaughter, Brazil could afford to supply seven packing houses with this number and still have 112,681' head left over. These figures are arrived at by assuming that all the cattle are slaughtered by packing houses and that the herds are held at the original figure, 21,000,000, upon which the calculation has been based. If, how- ever, the herds are increased, the output of cows will be decreased in that pro- portion, but this would be only for a few years, after which the output tff both cows and steers would again be increased. BEAZCUAN SHEEP INDUSTET. The report. of Consul General Gottschalk closes with brief remarks concerning the sheep-raising industry. The raising of sheep in Brazil, he says, is still in the experimental stage. Scientific develop- ment is possible at three points — in Minas Geraes, Parana, and Matto Grosso. The last-mentioned center for the industry has 400 head. The native herds of the State of Rio Grande do Sul have been fur- nishing considerable wool for export. Experiments made at the points mentioned with Romney March sheep seem to have been very successful, and this Kentish type, bred 1 It may be observe'd that Mr. MacKenzie's estimate pf 21,000,000 differs from the figure (30,000,000) mentioned on page 205, 208 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. for both wool and meat, has produced some Brazilian mutton of excellent flavor. Experts believe that on the extensive ranges that the country affords these sheep could very well be pastured on the same ground with neat cattle if the herds were not too bulky. NEW PACKING HOUSES. Under date of October 4, 1917, Consul General Gottschalk reported that two new packing houses were about to be added to the list given on page 205. One of these, he says, is to be at the town of Sitio, and the other (to have a capacity of 400 head of cattle slaughtered per day) is nearing completion at Barbacena. Both places are in the State of Minas Geraes. The enterprise concerned is the Companhia Pecuaria e Frigorifica de Brazil, working under a concession granted it by Decree No. 11999 of March 22, 1916. Its legal domicile is in the city of Rio de Janeiro. Its purpose is to exploit slaughterhouses, packing houses, and other more or less closely related industries, and to trade in and export the products of such industries. The company is also the possessor of the concession granted on May 10, 1910, by the State of Minas Geraes to Coronel Jose Horacio de Lemos. This is only a State concession, but it grants exceedingly wide powers to the concessionaires. Its capital is placed at 5,000 contos of milreis (over $1,000,000 United States currency). The company is likewise holder of another concession originally granted to Coronel Horacio Jose de Lemos, for the slaughtering of cattle and the establishment of packing houses in the State of Rio de Janeiro. TIMBER RESOURCES. The forestal wealth of the Republic of Brazil is perhaps as great as that of any country in the world. To name and describe the various trees would require a volume. The writer, who has traveled through large forest-covered areas of Parana and Santa Catharina, can but echo the universal praise that has been bestowed on this mag- nificently timbered country by those who have seen it. The timber industry of Brazil, despite its wonderful prospects, is only in its infancy, and but little has thus far been exported. Concerning the forest resources of Parana and Santa Catharina, one may quote the following excerpt from a report submitted to Great Britain by His Majesty's minister to Brazil, Sir W. Haggards : It is only necessary to traverse the magnificent forests of Parana and Santa Catharina to be convinced of the impossibility of estimating the immense wealth of timber in these two States. The great variety of woods may be judged from the fact that I was shown by a Brazilian gentleman at Curityba no less than 72 specimens of different woods found in the State of Parana alone. Some of these were of exceptional beauty. The most valuable and abundant of all these are undoubtedly the Parana pine and the imbuya, which are found in both States. The former resembles a church candlestick, with many branches rising upward from the top, or perhaps, to use a homely simile, a' blown-out umbrella, and when the trees are dead and bare of needles, they look exactly like the framework of an umbrella. Its straight trunk and freedom from limbs make it easily "handled" by the mills. It has very hard knots containing a great quanity of resin, which is used for pitch on the railway. Unlike other pines, however, it has no turpentine in sufficient quantities to make this a SOUTH AMEEIOA BRAZIL. 209 marketable commodity. The actual wood is sent in large quantities to Curityba, Sao Paulo, and Rio de Janeiro for building purposes. The larger trees, which have a height of about 100 feet and a diameter of 3 feet or more at the base, are said to be of almost incalculable age, as the rings marking the annual growth are so close as to be nearly indistinguishable, having in some cases, however, been counted up to 2,000. The wood, like that of the imbuya, sinks in water. The imbuya is a very hard wood, resembling mahogany, though, in my opinion, it is not as handsome as that wood. Presumably the first important foreign concern to enter the timber industry, in Brazil was the Brazil Railway, which through a sub- sidiary known as the Southern Brazil Lumber & Colonization Co. acquired 566,475 acres of forest land in the States of Santa Catha- rina and Parana. Three mills were constructed, these being known as the Tres-Barras, Calmon, and Sengas mills. By far the most im- portant of these mills is the Tres-Barras, which has a capacity of 40,000,000 feet a year. This is located at a place with a similar name situated on a branch of the Sao Paulo-Rio Grande Railway. The logs are handled at the mill on a monorail system, and there have been located at this place a fully equiped planing mill and box fac- tory, a number of dry kilns, etc. The timber areas owned by the company are estimated to contain 5,000,000,000 feet of standing timber, much of fine quality, this quan- tity being sufficient to run the mill at Tres-Barras at full capacity for a century. Under normal conditions a market for the lumber should be found locally and in Uruguay and Argentina. The first exports of lumber by rail from Tres-Barras were made in May, 1913, at the opening of the railway to the port of Sao Francisco. During part of the war period shipments were small, and lumber held in re- serve was more than sufficient for the export needs. This caused the temporary shutting down of the mills. These in 1912 produced as follows: Tres-Barras, 17,700,000 feet; Calmon, 4,800,000 feet; and Sengas, 500,000 feet. MANUFACTURING ENTERPRISES. Although by no means considered a manufacturing country, Bra- zil has made commendable progress along certain lines. Among various lines of manufacturing the textile industry has taken a high place, there having been in existence two years ago 303 factories, employing 74,609 operatives, the invested capital totaling 368,144,- 000 milreis and the annual output 278,289,950 milreis. The largest concern in this field of industry, the Companhia Nacional de Tecidos de Jute, in Sao Paulo, has a capitalization of 26,000,000 milreis and an annual output of 14,000,000 milreis. A total of 2,800 hands are employed, the company manufacturing sack- ing, yarn, rope, thread, etc. The company paid a dividend of 20 milreis per share in January, 1917, its 200-milreis shares being quoted at 210 milreis (105 per cent). The company, in addition to its stock, has two issues of debentures, each for 13,000,000 milreis, bearing interest at 8 per cent and. 5 per cent per annum, respectively. Interest on these issues is payable semiannually, January and July. The cotton mills are the leaders in the textile field, their arnual output totaling 237,499,000 milreis. Many of these are large com- panies, their shares being widely held locally and considered sub- 63018°— 18 14 210 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. stantial and profitable investments. The following table, showing the capitalization and output of the most important of these cotton mills, was .forwarded by United States Consul General A. L. M. Gottschalk from Rio de Janeiro in 1916 : Factories. Location. Capital. Annual output. Progreso Industrial do Brasil Connanca Industrial Fiacao e Tecidos Allianca Fiacao e Tecidos Botafogo * Fabrica Volorantim Brasil Industrial Companhia Petropolitana Manuf act urados Fluminense Fiacao e Tecidos Corcovada Fiae&o e Tecidos Carioca Cotonificio Rodolpho Crespi America Fabril Empdrio Industrial do Norte Industrial Pernambucana Sao Bernardo Fabril Industrial Reunidas F. Matarazzo. . Fiacao e Tecidos de Pernambuco . . . Societa Italc- Americana Fabril Pau list a Valenca Industrial Estamparia Ypiranga Progreso Industrial da Bahia Fabrica Paulistana Fiacao e Tecidos Sao Bento Fiacao e Tecidos N. S. da Ponte Otherer Sneer &Cia Industrial do Rio Grande do Norte. Industrial Sul Mineira Fiacao e Tecidos Cometa Fiacao e Tecidos Mageense Fiacao e Tecidos S. Martinho Taubat i Industrial Paulista Aniagen Fiacao e Tecidos Santo Aleixo Tecidos Porto- Alegrense Pinotti Gamba &Cia Sao Pedro de Alcantara Industrial Mineira Industrial Estancia Alagoanade Tecidos Fabrica Maranhense Fiacao e Tecidos Rio Anil Tecidos S. Italo-Brasileira Rio de Janeiro.., do do do Sorocaba Paracamby Petropolis Nictheroy Rio de Janeiro... do Sao Paulo Rio de Janeiro... Sao Salvador Camaragibe Sao Bernardo Sao Paulo Torre Saltodeltu P.ecife Valenca, Bairro Ypiranga. Sao Salvador Sao Paulo Jundiahy Sorocaba ....do Natal Itajuba Petropolis Mage* Tatuhy Taubate 1 Sao Paulo Santo Aleixo Porto Alegre Sao Paulo Petropolis Juizde Fora Estancia Cachoeira SaoLuiz ....do Sao Paulo Jfilreis. f3, 600, 000 13,000,000 12,750,000 12,000,000 10,000,000 9,800,000 9,000,000 9,000,000 8,730,000 8,400,000 8,000,000 7,600,000 6,740,000 6,000,000 5,700,000 5,000,000 5,000,000 4,825,000 4,600,000 4,135,000 4,000,000 3,742,000 3,600,000 3,500,000 3,500,000 3,410,000 2,800,000 2,800,000 2,800,000 2:730,000 2,500,000 2,500,000 2,500,000 2,400,000 2,300,000 2,250,000 2,200,000 2,200,000 2,200,000 2,000,000 2,000,000 2,000,000 2,000,000 MOrm. 8,800,000 8,500,000 6,800,000 10,200,000 6,400,000 6,000,000 5,000,000 4,200,000 5,200,000 6,300,000 3,900,000 5,600,000 4,000,000 3,500,000 2,500,000 5,400.000 4,500,000 3,000,000 4,000,000 2,400,000 2,900,000 3,200,000 1,410,000 2,050,000 2,000,000 2,500,000 720,000 981,000 2,500,000 2,600,000 2,000,000 1,085,000 2,000,000 960,000 1,500,000 1,850,009 1,300,000 1,890,000 1,500,000 2,000,800 1,500,000 1,400,000 2,000,000 1 Manufactures both cotton and woolen goods. Including the Companhia Nacional de Tecidos de Jute, of which mention has been made, there are 16 jute factories in the Republic, these 'operating approximately 3,300 looms. The jute is mostly im- ported from British India. Most of the product is used by the coffee producers. The woolen-goods industry is stated to hold forth excellent pros- pects, although thus far it has not assumed the importance of the cotton or weaving industries. In a report submitted under date of August 11, 1917, Consul General Gottschalk stated that there is a lack of official figures concerning the extent of this industry and the internal revenue derived from it. However, an association known as the Centro Industrial has published certain data as to number of mills, looms, and spindles, and according to these figures there were 35 woolen mills in operation in 1915, thus distributed: SOUTH AMEBIC A — BBAZIL. 211 Location. Mills. Looms. Spindles. 11 1 7 4 12 497, 24 322 144 377 1,000 750 6,800 1,566 Some of the above factories, however, are of relatively small im- portance. The industry is said to have employed 2,751 operatives in 1915. INDUSTRIES OF SAO PAULO. The industries of Sao Paulo are extremely numerous. At least one-fifth of the 500,000 people of the capital city are engaged in manufacturing and kindred industries, and it ranks as one of the three great manufacturing cities of South America. In his annual report for the year 1916, United States Consul Charles L. Hoover states that the 72 textile mills in the State employ 26,000 operatives and consume about 14,000 tons of cotton per year. Estimates place the value of the total production of textiles in 1916 at $22,041,360, of which $5,669,040 was represented by jute bagging and woolen, silk, and linen textiles and $16,372,320 by cotton manu- factures. In Sao Paulo, Mr. Hoover continues, there are 134 shops, foun- dries, and factories engaged in metal working. Among the articles produced are coffee-hulling machinery, small rice mills, cane mills, plows, farm tools, metal parts of railway cars, street cars, carriages, stoves, enameled sanitary ware, aluminum kitchen ware, cast-iron pipe, iron kitchen ware, brassware for buildings, .offices, and machinery parts ; certain textile-mill machinery, bells, machine tools, woven-wire fence, and repair parts for machinery. Iron must be imported, and during 1916 the United States was almost the sole source of supply. Some factories have small furnaces for the utilization of scrap iron and scrap brass, scrap iron being used in the production of practi- cally all castings. The manufacturing industries in this district include a large num- ber of establishments, many of which are small and employ only a few workmen. The character and the number of factories follow: Hats, 269 ; shoes, 67 ; hosiery, 21 ; white goods and shirts, 21 ; gloves, 20; sugar .mills, 769; sugar refineries, 309; alimentary pastes, 218; canned goods, 27; packing houses, 2; crackers, 103; preserves, 174; milling of cereals, 541; mandioca flour, 231; dairy products, 53; vinegar, 34; breweries, 270; brooms and brushes, 19; soft drinks, 200 ; furniture, 304 ; vegetable oil, 6 ; starch, 2 ; rope, 16 ; trunks and bags, 56; harness and saddles, 248; tanneries, 6; paper and paste- board, 3; articles of metal, 7; machinery, 65; foundries, 62; wood- working, 558; brick and tile, 972; lime, 47; wagons and carriages, 383 ; railway machine shops, 18 ; matches, 12 ; soap, 195 ; candles, 19 ; oils and resins, 30; paints, 9; chemical products, 18; pharmaceutical products, 9; cigars and cigarettes, 158; and others, 932. INDUSTRIES OF BAHIA. United States Consul Eobert Frazer, jr., in a report dated June 10, 19.16, gave the following information concerning the industries of Bahia : 212 INVESTMENTS IN LATIN AMERICA AND BKITISH WEST INDIES. According to the latest statistics published on the subject (in 1913), there were at that time a total of 83 industrial establishments of different kinds in the City of Bahia, having a combined capital of about $10,000,000, an annual production of between $8,000,000 and $9,000,000, and a total of about 10,000 employees. Of the fore- going, something like 85 or 90 per cent are engaged in the textile (cotton and jute), sugar, and tobacco (cigars, cigarettes, and snuff) industries. There are now 15 sugar mills of importance in operation in the State of Bahia, besides one in liquidation and one not working. These 15 have a total capital of $5,525,000 (at present exchange), about 800 employees (not including field workers), and a combined average annual production of about 30,000 metric tons of sugar. There are five important textile mills at Bahia, of. which one makes jute bagging and the other four cotton goods. The jute mill em- ploys approximately 400 persons, is capitalized nominally at $125,000 (500 contos), and in 1915 declared a dividend of 24 per cent. ■ It turns out annually approximately 20,000 pieces, containing 2,187,222 yards (2,000,000 meters) of goods. The four cotton mills each employ from 1,200 to 1,400 persons, and each turn out from 7,000,000 to 9,000,000 meters (7,655,278 to 9,842,500 yards) of goods per annum. While none of the four paid dividends in 1914, in 1915 three paid 8 per cent each and the other, although it paid no divi- dend, made a small profit. EIO DE JANEIRO FLOUR MILLS & GRANARIES (LTD.). There are a few foreign companies in the Republic interested in manufacturing. Among these may be mentioned the Rio de Janeiro Flour Mills & Granaries (Ltd.), a British company, registered in 1886. The authorized capitalization of the company is £800,000, of which £608,001 has been subscribed for and issued. The par value of the shares is £1. Approximately £25,000 of an original issue of £150,000 first-mortgage 5 per cent debentures remain outstanding. Shares were quoted in January, 1918, at 61s., this being equivalent to 305 per cent of par. Dividends have usually been at the rate of 15 per cent per annum, while in several of the years stock dividends or cash bonuses were paid. The reserve fund in 1916 amounted to £116,000 and the company was in a very prosperous condition. In 1910 the company decided to construct a cotton spinning and weaving mill and to make other improvements. LOCAL MANUFACTURING COMPANIES There follows a list of a few local manufacturing companies, capi- talization and value of shares being indicated : SOUTH AMERICA BRAZIL. SHARES. 213 Companies. Outstand- ing. Par value. Reserves. Last Armazens Frigorificos Brasileira de Automoveis Brasileira de Carnes Congeladas Brasil de Telegrapho sem no Docas de Santos Explosives de Seguranca Geral de Melhoiamentos do Maranhao.. . Geral de Melhoramentos de Pernambuco Industrial de Melhoramentos no Brasil. . Melhoramentos na Bahia Melhoramentos no Espirito Santo Melhoramentos de Sao Paulo Porto de Victoria Sampaio Correa & Cia Technica e Importadora. . .- Viacao e ConstruccOes Milreis. 6,000,000 200,000 1,000,000 300,000 60,000,000 600,000 ' 3,200,000 6,000,000 1,000,000 6,000,000 250,000 6,000,000 3,000,000 1,350,000 200,000 1,500,000 Milreis. 200 200 100 200 200 100 100 100 200 100 200 200 200 200 200 200 200 Milreis. Milreis. 4,919 200 103 451 11,815 497,337 40 30 516,872 89 300,000 2,152,523 DEBENTURES. Companies. Issues. Total number. Out- standing. Par value. Last sale. Armazens Frigorificos Brasileira Auto- Viacao Brasileira de Minas Caminho Aereo Pao de Assucar Centro Pastoris do Brasil Docas de Santos Geral Melhoramentos em Pernambuco Milreis. 6,000,000 1,000,000 1,200,000 360,000 200,000 60,000,000 o8,000,000 30,000 5,000 6,000 3,600 1,000 300,000 16,000 All. All. 4,000 All. 778 All. All. Milreis. 200 200 200 100 200 200 o500 Milreis. 190 206 a Francs. SUMMARY. This report has briefly outlined the development of the manufac- turing industries of Brazil and has in a general way called attention to opportunities in. the field. That expansion along manufacturing lines is certain is indicated by the general prosperity of the companies now in the field and the realization on the part of the people of the .country that they are no longer wholly dependent on outside sources for their goods. Although the fuel problem has not yet been satis- factorily solved, the possible development of the coal mines and the vast amount of available water power will in time probably overcome these difficulties. FOREIGN INVESTMENTS IN BRAZIL. The great undeveloped and partly developed resources of the Re- public of Brazil have proved a magnet to attract considerable sums of foreign capital. Great Britain and France have, as usual, taken the lead. Listings of Brazilian bonds and stocks on the London Stock Exchange amount to more than $1,150,000,000, a sum that is believed, however, to be greater than the total of British investments in the country. Most of the Government bonds and some of the railway securities are also quoted in Coi.tinental markets, and many are held outside of Great Britain. Perhaps $750,000,000 would be a fair and conservative estimate of British investments in Brazil, and 214 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. as has been indicated in this report, these cover almost every field of enterprise. France has long favored Brazil, in preference to other South American countries, and its citizens are the holders of very large amounts of Government, State, and municipal bonds and securities of railways, banks, etc. Estimates of the aggregate of French capital in the field vary from $400,000,000 to $900,000,000. Probably $500,- 000,000 would be a conservative figure. Belgium is the holder of Government bonds and has a large in- terest in the Brazil Eailway and a few other enterprises. There is probably $150,000,000 of Belgian money in Brazil. German influences in Brazilian investments have been considerable. Some of the Government bonds are held in Germany, the Teutonic chain of banks are important, and Germans residing either in the home country or Brazil have more or less extensively developed southern Brazil and are interested in public utilities, plantations, etc. One of the two German-owned railways in South America is located in Brazil. This line, the Blumenau Eailway, is located in the State of Santa Catharina. The builder of this railway, which is 70 kilo- meters (44 miles) in length, received the official congratulations of the German Government and a decoration from the Kaiser at the date of the opening of the road for through traffic. Following the declaration of war by Brazil, the line was taken over by the Brazilian Government. Although no estimates of the aggregate capital invest- ments of Germany in Brazil are available, it is safe to state that British and French interests in the field are considerably larger and more important. There is a certain amount of Portuguese capital in Brazil. The relationship between the two countries is close, their interests are somewhat allied in a general way, and their language is the same. The Banco Ultramarino, a powerful and successful bank, is prob- ably the most important Portuguese financial institution in the Republic. Portuguese capital is also said to be invested in guar- anteed mortgages, coffee estates, etc. Italian investments are principally confined to the State of Sao ■: Paulo and neighboring districts. Italy has been a powerful factor in the development of the coffee district and is in no small way responsible for the progress of the city of Sao Paulo. Its banks are strong and profitable and form the keystone for Italian enterprise. The United States during recent years has realized the potential wealth of Brazil and is to-day rapidly becoming a factor in its devel- opment. Cattle raising and meat packing, mining, and other fields of enterprise have attracted the attention of American financiers, and the National City Bank, with its several Brazilian branches, has assumed considerable importance. American investors hold bonds of the city of Sao Paulo, notes of the Brazilian Traction, Light & Power Co., and a few other Brazilian securities. The Brazil Rail- way, although incorporated in Maine, was practically wholly financed abroad, as were most of the Farquhar-Pearson enterprises. There is probably $50,000,000 of American capital in Brazil, al- though this figure is simply an estimate. The Brazilian Traction, Light & Power Co. is a Canadian enter- prise, although large amounts of its securities are held in Great SOUTH AMERICA BRAZIL. 215 Britain, the United States, and Brazil. With the exception of an- other public-utility company, it is the only important Canadian enterprise in the field. The foregoing report has indicated that the amounts of local Brazilian capital invested in manufacturing and other fields of enterprise are surprisingly large. Such companies as the Com- panhia Docas de Santos and the Companhia Nacional Tecidos de Jute have been highly successful. There is probably more than $100,000,000 of local capital invested in the textile industry, and there is considerable home capital in Government, State, and mu- nicipal securities, railways, public utilities, banks, insurance com- panies, etc. As a final word it need only be said that Brazil is one of the largest and richest countries in the world and that opportunities to develop its marvelous resources are unlimited. CHILE. INTRODUCTION. The Republic of Chile, with an area of approximately 292,500 square miles, is situated along a narrow stretch of land between the Andes and the Pacific Ocean, extending in the general direction of north and south for about 2,700 miles. The width of the coun- try varies from about 65 to nearly 250 miles. The coast line of the Republic may be said to be 23 times greater than its average breadth. If one sailed from the cost of Labrador southward to the Guianas in South America he would cover no greater distance than if he had followed this length of the Chilean coast. Chile's 3,870,023 inhabitants make up one of the hardiest and most progressive races in the Western Hemisphere. The country is developing fast, especially in the production and exportation of its vast mineral wealth. During the century 1810 to 1910 the mineral production of the Republic has been estimated as follows: Nitrate (since year 1830 only), $1,225,300,000; copper, $664,292,000; silver, $298,695,000; coal, $114,516,000; gold, $68,084,000. In addition, large quantities of borax, salt, iodine, sulphur, iron, manganese, etc., are taken from the earth. The Republic may be divided into four distinct zones, as follows : The northern or desert zone, extending from 17° 15' to 27° south latitude. In this zone are the cities of Iquique, Antofagasta, Talta), etc. Herein are located the nitrate belt and very extensive deposits of copper, especially those found at the mines of the Chile Copper Co. at Chuquicamata. The country is virtually rainless and barren of vegetation, no rivers of any importance existing. Nevertheless, this zone is the center of the greatest natural wealth of the entire Republic. Several railways traverse the district and steamship serv- ice is excellent. The second or mineral zone extends from the southern boundary of the desert zone as far south as 33°. Minerals of all descriptions are found in this district. The country is generally arid, although there is a fair amount of cultivation in the Central Valley. The south-central or agricultural zone extends from 33° to 42° south, and in it are included the cities of Valparaiso and Santiago and the rich and fertile Central Valley- This valley contains a num- ber of important rivers, some of which are navigable. In addition to its agricultural areas the Central Valley contains coal and other minerals and large timber areas. The southern or island zone extends from 42° south to Cape Horn. This district, which includes the island of Tierra del Fuego and the territory of Magallanes. with their immense areas of sheep-grazing lands, is quite thinly populated. 210 SOUTH AMERICA — CHILE. 217 Chilean foreign trade in 1917 reached the record total of $389,588,- 610. The previous record figure was for 1916, with a total for ex- ports and imports of $268,678,534. In 1912 and 1913 Chilean foreign trade amounted to $261,954,195 and $264,927,313, respectively. In 1917 the exports amounted to $259,985,495 and the imports to $129,- 603,115; the United States furnished $63,534,755 worth of the im- ports and took $155,006,103 worth of the exports. FINANCES AND PUBLIC DEBT. As an indication of the national income, expenditure, and public debt of Chile the following table is submitted. The heavy decrease in national income during the years 1915 and 1914 may be attributed almost wholly to the decrease in customs receipts resulting from the European war. The figures are expressed in Chilean gold pesos of 18d. (equal to $0,365 United States currency) : Years. Income. Expenditure. Public debt. 1911 Gold pesos. 197,502,232 228,295,252 220,173,450 141,008,723 124,543,108 Gold pesos. 199,013,800 235,126,800 215,476,800 175,461,800 175,534,908 Gold pesos. 575,658,400 1912 567,818,100 625,819,200 616,481,600 607,449,003 1913 1914 1915 Customs receipts for 1915 amounted to 91,397,396 Chilean gold pesos, as compared with 159,259,254 pesos in 1913. The general na- tional income for 1916 was much larger than for 1915, and a surplus was stated to have been shown, although figures at the date of writ- ing are not available. There was an increase in customhouse revenue of approximately 48,000,000 Chilean gold pesos, of which increase $33,000,000 was derived from the increased exports of nitrate. The total tax on the exportation of nitrate for 1916 amounted to 100,273,707 Chilean gold pesos. The receipts and expenditures of* the Government for the year 1917 were estimated as follows : Paper pesos. Gold pesos ofl8d. Receipts Expenditures. 128,550,000 194,284,356 81,540,000 70,825,014 Of the estimated expenditures as stated above, 3,846,000 paper pesos and 22,463,000 gold pesos have been provided by loans and spe- cial legislation. The national assets of Chile were estimated as of December 31, 1915, to be valued at 417,675,275 paper pesos and 828,105,405 gold pesos of 18d. State railways were valued at 32,194,946 paper pesos and 228,105,405 gold pesos of 18d. In addition, the Arica-La Paz Railway was carried at a valuation of 73,853,153 paper pesos. The conversion fund, as of December 31, 1915, was held as follows : In Great Britain, £6,019,727; in Germany, 41.708,692 marks; in Chile, 3,643.634 gold pesos. A total of 150,000,000 paper pesos were in circulation December' 31. 1915. 218 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. A brief resume of the funded debt and responsibilities of the State follows : Character of obligations. Amount. Character of obligations. Amount. EXTERNAL DEBT, DEO. 31, 1915. £32,556,380 2,000,000 RESPONSIBILITIES OF STATE — COn. (&) In Chilean gold of 18d— Con. Gold pesos. 150,000,000 49,227,840 34,556,380 204,843,840 RESPONSIBILITIES OF STATE. 3,055,750 4,026,000 967, 140 (c) In currency: Paper pesos. 34,507,735 North Longitudinal Railway South Longitudinal Railway Chilean Transandine Railway. . . 1,354,858 1, 997, 827 2,804,300 34,721,000 853,119 Deficit in accounts current Total 8,048,890 Total (6) In Chilean gold of 18d.: Gold pesos. 5,616,000 76,238,839 » General description in later paragraph. 6 Five per cent; matured Dec. 31, 1916. The rate of exchange for the paper peso is subject to wide fluc- tuations. As of January 1, 1918, the value was $0.2825 United States currency per peso, as compared with $0,213 April 20, 1917, and $0.14 July l r 1916. By July 1, 1918, the exchange rate had risen to about $0.33. The total debt of Chile as of December 31, 1915, including the 150,000,000 paper pesos of money outstanding, amounted to 607,449,- 003 gold pesos, equal to 166.81 gold pesos per head of population. EXTERNAL LOANS. The external loans of the Republic, dates of issue, amounts origin- ally issued and outstanding December 31, 1915, are as follows 1 : Date of issue. Interest rate. Amorti- zation. Original issue (pounds sterling). Amount outstand- ing Dec. 31, 1915. (1) 1885 Per cent. 4i 4} 4J 4i 5 6 a 41 *i 5 5J 5 4i 5 5 4i 5 5 Per cent. i i i i i l I i i i 2 1 2 i 1 H r i £808,900 6,010,000 1,160,200 1,546,400 1,800,000 149,000 630,000 2,000,000 265,000 4,000,000 200,000 1,350,000 3,700,000 3,000,000 2,600,000 275,000 4,905,000 5,000,000 £489,500 3,950,400 766,000 1,178,460 1,386,700 80,000 470,600 1,593,400 213,740 3,326,100 51,700 1,214,000 2,737,320 2,892,400 2,446,700 253,200 4,681,240 4,826,220 (2) 1886 (3) 1887 (4) 1889 (5) 1892 (6) 1892 (7) 1893 (8) 1895 : (9) 1896 (10) 1896 (11) 1896 (12) 1905 (13) 1906 (14) 1909 (16) 1910 (16) 1910 (17) 1911 Total 39,399,500 32,556,680 1 Editor's Note.— Figures that have become available since the preparation of the text ? f &'? o r ,?? /L show tna * Chilean external bonds outstanding December, 1916, amounted to £31,808,640, representing unpaid portions of 18 different loans dating from 1885 Two of these loans were placed through the Deutsche Bank and most of the other? through London concerns. In addition, treasury bills amounted to £676 oqo 1 this 100 pesos a total of 40 pesos has been paid in. INSURANCE COMPANIES. The insurance business in its various phases has assumed large proportions in Chile. A number of foreign companies (mostly Brit- ish, with a few German) have entered the field and have secured a very large share of the business. The Government receives from the companies a tax equal to 2 per cent of the premiums received by them. As an indication of the amount of business done by the insur- ance companies, local and foreign, the following table is appended: Companies. Insurance effected from Jan. 1 to Sept. 30, 1916. Premiums paid. Paper pesos. 756,542,022 1,002,389,212 Paper pesos. 8, 186, 550 10,452,484 Total 1,758,931,234 18,639,034 An estimate made several years ago indicated that of the total insurance handled 48 per cent was by local companies, 47 per cent by British companies, and 5 per cent by German companies. Since this estimate was made the proportion written by foreign companies has increased, amounting during the period from January 1 to Septem- ber 30, 1916, to 57 per cent of the total. One of the important local companies is La Alianza Chilena, capi- talized at 2,000,000 paper pesos. This company earned during the six months ended December 31, 1916, a profit of 414,163 pesos, of which 160,000 pesos was paid as an 8 per cent dividend and 140,000 pesos appropriated to cover the dividend of 7 per cent paid July last. Reserves of various kinds as of December 31, 1916, amounted to 1,269,952 pesos. The 25-peso shares of this company were quoted in May, 1917, at 40. La Chilena Consolidada likewise has a capital of 2,000,000 paper pesos. Its half-year profits totaled 207,930 pesos, of which 160,000 pesos was paid as an 8 per cent semiannual dividend. Reserves amounted to 1,838,868 pesos. La Espaiiola, one of the richest of the smaller companies, has a capitalization of 200,000 paper pesos and reserves, shareholders' funds, etc., of 2,324,914 paper pesos. Profits for the second half of 1916 totaled 192,803 pesos, of which 100,000 pesos was distributed as a dividend of 50 per cent and the balance carried to shareholders' and dividend funds. The 10-peso shares of this company sold in May, 1917, at 140. 228 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. La Francesa earned a profit of 60,448 paper pesos during the sec- ond half of 1916. A dividend of 20,000 pesos (10 per cent) was paid on the 200,000 paper pesos stock of the company. Reserves amounted to 435,583 pesos. The Anglo-Chilena company, a new concern, has a capitalization of 500,000 paper pesos. The Franco-Chilena company made a profit of 47,082 paper pesos during the second half of 1916. Dividend payments amounted to 40,000 paper pesos. The capitalization is 1,000,000 paper pesos. La Italia made a profit of 73,819 paper pesos during the six months' period. Of this sum, 50,000 pesos was paid as a semiannual dividend of 10 per cent. This company's statement as of December 31, 1916, showed various reserves to the amount of 796,559 paper pesos and a capitalization of 500,000 paper pesos. La Protectora. a small but successful company, earned during the period 65,156 pesos on the 100,000 pesos stock outstanding. The dividend for the period was 60 per cent, a further indication of pros- perity. The 25-peso stock of this company sold in the market in May, 1917, at 300 pesos per share. Reserves as of December 31, 1916, totaled 950,533 pesos. La Previsora's profits were 30,070 pesos, which was credited to various funds. The capitalization is 200,000 pesos and reserves total 227,008 pesos. Among the various other companies operating in the field the fol- lowing may be mentioned : (1) La Alemana, which has a capitalization of 2,000,000 pesos, of which 300,000 pesos has been paid in. Reserves and funds amount to 559,373 pesos. (2) La Comercial, founded in 1899. (3^ La Republica, with a paid-in capital of 500,000 pesos. (4) La Nacional, with a paid-in capital of 200,000 pesos and re- serves to the amount of 2,323,914 pesos. This company, the 25-peso shares of which sell at 550 pesos (May, 1917), has paid 1,520,000 pesos in dividends since beginning business January 1, 1899. (5) La Mundial (the " World "), with a capital of 2,000,000 pesos. Most of the companies handle a general business — fire, life, acci- dent, etc. As an indication of the prosperity of the various Chilean insurance companies, the following table is appended, showing par value and market value of the shares of the various companies: Companies. Par value of stocks. Market price May, 1917. Companies. Par value of stocks. Market price May, 1917. Paper pesos. 75 25 25 50 25 25 50 25 10 50 Paper pesos. 200 40 62 95 25 35 125 49 140 110 Paper pesos. 20 25 57$ 25 100 25 75 25 50 50 Paper pesos. 25 La America 55 92 213 555 90 La Comercial La Chilena Consolidada La Espafiola 163 630 SOUTH AMERICA CHILE. 229 RAILWAY DEVELOPMENT. Chile has, during recent years, developed a large railway mileage. Railways extend from near Iquique, 20° south, to Puerto Montt, 42° south, forming an artery through the central sections of the Repub- lic; while from almost every port and seacoast town lines radiate inland, either to connect with the railways Tunning north and south or to reach some important center of mining or agricultural wealth. The Republic contains the termini of three international lines, two extending into Bolivia and one into Argentina. Future plans call for the construction of additional lines to Argentina, as well as the construction of new local lines and the extension of existing rail- ways. As of December 31, 1916, the total mileage of railways in operation in Chile was 6,014 (9,678 kilometers). On the date men- tioned, 148 miles (237 kilometers) of new lines were under construc- tion. A considerable additional mileage is contemplated. The gauges of the existing railways vary from 2 feet 6 inches, used by the Antofagasta & Bolivia Eailway, to 5 feet 6 inches, used by the State Railways in central Chile. There are in all six different gauges in use. A very large proportion of the railway mileage is under State control. Chile was first placed on the railway map in 1849, in which year William Wheelwright, an American, founder of the Pacific Steam Navigation Co., completed the construction of a line from the port of Caldera to the mining town of Copiapo. This is the oldest existing line in Latin America and, with the exception of the Demarara Rail- way in British Guiana, is the oldest line in South America. A short time after the completion of the Caldera-Copiapo line, Wheelwright, together with another American, Allen Campbell, sur- veyed the existing Government line between Valparaiso and San- tiago! A few years later construction work was begun by S. W. Greene, of Rhode Island. The line was finally completed in the year 1863 by Henry Meiggs, of the "United States, famous as the builder of the Central Railway of Peru. It is said that when Meiggs took over the contract to complete the road (this was late in 1861) it was stipulated that the line must be completed in three years. A fine of $10,000 per month was to be paid by Meiggs for each month's delay in the completion of the railway, and he was to receive $10,000 for each month gained in carrying out the contract. So fast did Meiggs push the construction of the railway that more than a year was gained. The cost of this line was, it is stated, $11,300,000 United States currency. ' Chile for many years has favored State ownership of railways and has acquired or constructed a large mileage. As of December 31,. 1915, these railway properties were valued by the Government as follows : Railways. State Railways Arica-La Paz Railway. Total Paper pesos 32,194,946 73, 853, 188 106,048,134 Gold pesos of lid. 228,105,405 228,105,405 230 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. CENTRAL RAILWAY. The distance from Valparaiso to Santiago by the Central (State) Railway is approximately 125 miles. The gauge of the line is 5 feet 6 inches and the highest station, Las Chilcas, 2,051 feet. Trains carrying American parlor cars make the run in four hours. South from Santiago the railway follows the rich Central Valley, the altitude of this section varying from 100 to 1,700 feet. Fast express trains are maintained between Santiago, Talca, Concepcion, and Talca- huano, while through trains run to Valdivia and Puerto Montt. All this section of the railways does a large freight and passenger busi- ness. There are a number of important branches on the line, includ- ing (1) a line from Santiago to Port Antonio, which will greatly increase in value following the completion of the port works at the latter place; (2) the Los Andes branch, which connects with the Chilean Transandine Railway, a portion of the through route to Buenos Aires; (3) the Calera to Cabilda branch, which joins the terminus of the Longitudinal (State) line at the latter place; also branches to Talcahuano, Constitucion, Carahue, Valdivia, etc. LONGITUDINAL RAILWAY. The Longitudinal Railway, which operates or is constructing the State lines northward from Cabilda, is, unlike the Central Railway, of meter gauge.' This railway, which is eventually to be carried northward as far as Arica, was constructed primarily for strategic reasons and, secondarily, to develop certain important sections of country and connect various cities and towns in the interior. As it stands to-day the Longitudinal Railway does not handle a very ex- tensive traffic, particularly in its more northerly sections. A weekly train service is maintained between Antofagasta (Antofagasta & Bolivia Railway to Aguas Blancas) and Santiago. Two changes of cars are necessary, and the running time is about three and one- half days. The numerous steamers plying along the coast are very serious competitors for through traffic, and the Longitudinal line is very badly in need of additional equipment. The " cabotaje " trade or coastal commerce of Chile during 1915 amounted to 275,011,704 paper pesos. As of December 31, 1915, the Government of Chile had guaranteed £7,081,750 bonds issued to construct the Longitudinal lines. These were divided as follows: North Longitudinal Railway, £3,055,750; South Longitudinal Railway, £4,026,000. The northern section of the line was constructed, by the Chilean Northern Railway for the Government, the bonds being issued and publicly offered for sub- scription in London, with, as stated, the interest (5 per cent) and sinking fund guaranteed by the Chilean Government. The January, 1918, price for the bonds was 86. The North Longitudinal Eailway (Chilean Northern Railway) operates that section of the Longi- tudinal line located north of Copiapo, while the southerly section, Copiapo to Cabildo, is operated by the South Longitudinal Railway. The £4,026,000 South Longitudinal bonds were issued by the Gov- ernment in three series, dated 1910, 1913, and 1914. Bonds outstand- ing under these three series amount to £1,073,088, £1,099,945, and £1,634,175, respectively, and the average market price for the loan SOUTH AMERICA CHILE. 231 in London January, 1918, was 87-90. The bonds under series " B " issued in 1913 by J. Henry Schroeder & Co., of London, were pub- licly offered at 96. They bear interest at 5 per cent per annum and are retirable by a sinking fund, cumulative, of 2 per cent per annum. On the southern section of the railway some very heavy grades are encountered, necessitating the use of the Abt rack system. Ap- proximately 28 miles of this rack system are in use, the maximum gradient being 6 per cent on the rack line and 3 per cent on the or- dinary section. There are rather long tunnels en route, and portions of the line are located in sections where railway construction was difficult. The Chilean Northern Railway section of the system ex- tends northward from Copiapo to Pintados, the latter point being located southeast of Iquique. Here connections are afforded with the Nitrate Railways to Iquique and Pisagua. A line into Iquique, to be operated by the Longitudinal Railway, is under construction. Lines to connect the main stem of the railway with Antofagasta and Mejillones have been approved by the Government. These lines have been located and will probably be constructed in the immediate future. The extension of the main line to Arica is expected to be built northward from Zapiga, a station on the Nitrate Railways, which railway directly connects with the existing Longitudinal line at Pintados; this, however, will probably not be constructed in the immediate future, owing to lack of funds. This section of the line will be about 175 miles (278 kilometers) in length and will not pro- duce a great amount of local traffic. Connections will be afforded with the Arica-La Paz Railway to Bolivia, and the Arica & Tacna Railway at Arica, which will mean that the nation will have direct railway connections between Tacna, which is practically on the bor- der with Peru, on the north and Puerto Montt on the south. FINANCES AND OPERATING RESULTS OF GOVERNMENT RAILWAYS. The railways acquired by the Government and consolidated into the State system earned during the years 1855 to 1884 (in which latter year the consolidation was effected) 67,362,244 paper pesos gross and 27,117,230 pesos net. the ratio of operating expenses to gross earnings being approximately 60 per cent. In 1884, the first year of the State Railways, gross receipts totaled 6,000,000 paper pesos and net receipts 2,858,757 pesos. Slightly less than 600 miles of line were operated. During the 10-year period 1885 to 1894, a profit was consistently shown, the net receipts during this period exceeding 16,600,000 paper pesos. In 1885, for the first time in the history of the State Railways, a deficit (455,255 paper pesos) re- sulted. The mileage at that time was about 820. In 1896 there was a deficit of 164,711 paper pesos. Gross earnings for that year totaled 13,126,273 paper pesos. During the period 1897 to 1906 expenses were, on the average, about equal to revenues. In the latter year approximately 1,543 miles of line were operated, and gross receipts had reached the total of 24,800,000 paper pesos. In 1907 a deficit of 20,506,407 paper pesos resulted, and during the years 1908 to 1913 the deficits averaged between 10,000,000 and 21,000,000 paper pesos. Recently conditions have improved considerably, and it is stated that profits have been earned for the year 1916 to the amount of 8,000,000 paperpesos. Further data concerning the operating results of the various State lines will be furnished in a later paragraph. 232 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. In addition to tne Central Kailway and the North and South Longitudinal Kailways, the State operates several lines, among them the Coquimbo, Copiapo, Huasco, Chanaral, and Arica-La Paz Rail- ways. CALDERA-COFIAFO LINE. The Caldera to Copiapo line, the oldest railway in Chile, runs from the port of Caldera, 47 miles south of Chanaral, to Copiapo and San Antonio (about 100 miles) , with about 75 miles of branches. The Longitudinal Railway is joined at Toledo. An extension of this line through the Andes to Argentina has been discussed for half a century or more. Formerly this railway was quite profitable, but during recent years operating expenses have shown a steady advance. Copper is the principal commodity handled, this being shipped from Caldera. The port is a good one, being fairly well sheltered, and the town handles a considerable amount of business. Copiapo is like- wise an important, up-to-date city. The gas works located there were established by William Wheelwright, the American pioneer of railway development in South America. COQUIMBO RAILWAY. The Coquimbo Railway was acquired by the Government in sec- tions. The portion of the railway from Trapiche to Tongoi was constructed by the North American Syndicate and cost £203,371. In 1899 a mortagage covering this property was foreclosed and in 1901 the Government acquired the line for £19,250, the amount of the mortgage. In 1896 the Coquimbo Railway proper was acquired from an English company for £245,000, and £20,000 additional was expended to acquire other mileage. The Government issued £265,000 4J per cent bonds to provide funds for the cost of the undertaking, and such of these as remain outstanding are included in the indebted- ness of the Republic. A large portion of this railway was originally of 5-foot 6-inch gauge; this, however, has been changed to meter gauge, partly by means of a third rail. The section of the railway to Rivadavia was purchased in 1895 for £200,000. A part of the mileage of the Coquimbo Railway is now included in the Longi- tudinal line. Coquimbo, the main port of this railway, is situated about 200 miles north of Valparaiso. It has nearly 25,000 inhab- itants and is of considerable importance. The iron mines owned by the Bethlehem Steel Corporation are located no great distance from the city. Serena, an important town on this line, has a popula- tion of more than 20,000. Although within a mile of the sea, it is not a port ; it is, however, capital of the Province of Coquimbo. HUASCO RAILWAY. The Huasco Railway, a short line, links the port of Huasco with Vollenar, the junction with the Longitudinal Railway. This rail- way is about 31 miles in length and is of meter gauge. Huasco, the port, is 165 miles south of Caldera, and is located on a bay that has shelter from the south and west. Minerals, hay, hides, and live stock are the chief exports, a large coastal trade being handled. Vollenar, the eastern terminal and junction, is located in an irrigated valley in which large amounts of fruit are raised. The Huasco Rail- way's operations annually result in a small profit. SOUTH AMERICA — CHILE. 233 ARICA-LA PAZ RAILWAY. The Ariea & La Paz Railway, which extends from the Chilean port of Arica over the Andes to La Paz, Bolivia, was the result of a treaty signed by Chile and Bolivia, which stipulated that Chile should construct the road, the Bolivian section to be acquired by the latter Government 14 years after the line had been opened for traffic. Thus Bolivia will acquire its portion of the line in the year 1926. Of the 248 miles of line between Arica and La Paz, 129 miles are located in Chile. The entire line cost more than $15,000,000 to con- struct and is by far the shortest of the three lines between La Paz and the Pacific Ocean. The line strikes off in a northeasterly direc- tion from Arica, paralleling the Arica & Tacna Railway (which see) for a few miles, and soon begins its climb, through a barren, water- less waste, toward the top of the Andes. So rugged is the country traversed that the engineers when surveying the line were frequently compelled to blast a trail out of the solid rock in order to advance up the mountain side. The temperature would sometimes register below zero, Fahrenheit, in the early morning hours and would advance to 100° at noon. Engineering difficulties were encountered on every side. Six tunnels had to be bored and upward of 5,500,000 cubic yards of earthworks used. Along one section of the line the rise is sufficiently great to compel the use of 28 miles of rack rail, the long- est continuous stretch of the rack system in the world. The railway crosses the divide at an altitude of approximately 14,000 feet, the highest point being located near Laguna Blanca, Chile. The railway maintains a semiweekly passenger-train service be- tween Arica and La Paz. The system is, however, almost completely demoralized owing to the insufficient equipment. There are not more than two locomotives in service capable of handling trains over the rack section. Port facilities at Arica are at present inadequate. The Corocoro mines in Bolivia have been unable to find means to trans- port their ore, and international freight service has been almost sus- pended. Forty days is allowed by the Chilean Government for the delivery to Bolivia without customs duties of freight shipped from foreign countries into Bolivia. This period frequently elapses be- fore this freight can be handled and innumerable difficulties result. The railway is starving in the midst of plenty, and the Chilean Gov- ernment, realizing this fact, is taking steps for the relief of the property. The line may possibly be electrified; it will, at least, be completely rehabilitated. EARNINGS AND EXPENDITURES OF GOVERNMENT LINES. As stated in a previous paragraph, the net earnings of the Govern- ment railways have shown improvement during the past two or three years. A comparison of gross earnings and expenditures during the period from 1913 to 1916, inclusive, is here shown : Years Gross earn- ings. Expendi- tures. 1913 ,. Paper pesos. 67,989,348 60,234,714 73,720,401 74, 125, 187 Paper pesos. 80,211,299 1914 75,321,188 1915 63,721,848 66,232,690 1916 234 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. For the period January 1 to March 31, 1917, gross earnings totaled 19,784,813 paper pesos as compared with operating expenses to the amount of 14,804,664 pesos. RAILWAY STATISTICS. Statistics follow for the'year 1913 of the capital employed, length, amount of equipment and traffic of the various railways of Chile, State and privately owned. The statistics are for a year during which operations of lines other than the Longitudinal and Arica- La Paz were carried on under normal conditions. The Longi- tudinal lines were not fully completed and the Arica-La Paz Kail- way had just been placed in operation, so their figures in this table can not be taken as an indication of earning capacity : Railways. Capital. Earnings. Expenses. Equipment in service. Loco- mo- tives. Pas- sen- ger cars. Freight cars. Passengers carried. Freight carried. Gold pesos. Arica-La Paz 44,555,000 Longitudinal. 94,423,333 Northern Lines f isolate d)a 10,837,891 Central (State) 258,383,484 Line Chilian to Pinto, etc. 805,280 Chiloe Island Railway System 2,176 164 Privately operated rail- ways 252,733,128 Gold pesos. 345,285 663,187 1,899,628 37,034,052 64,000 13,594 38,812,037 Total.. 663,914,280 Gold pesos. 1,053,855 1,800,000 2,249,125 42,475,128 73,000 54,385 22,232,630 18 75 81 582 78,831,783 70,039,123 1,453 2 248 128 742 1,004 6,304 4 9,791 9,825 57,000 586,399 12,291,154 80,204 1,130 1,896,312 Tom. 18,594 60,500 492,373 4,795,880 10,938 15,230,783 986 18,001 14,926,424 20,610,676 a Coquimbo Railway, Huasco Railway, etc A total of 31,323 persons were in the service of the railways of Chile on December 31, 1913. Of these, 25,323 were employed on the Government lines. The Government's line on the island of Chiloe is of 0.60-meter gauge and extends from Ancud, the northerly port of the island, to Castro (60 miles). The island is richly timbered and fertile. Manu- factures have developed to some extent. There are approximately 67 industrial establishments, including two breweries, three tanneries, seven sawmills, and three other mills. Ancud has a population of 3,546 and is in direct steamer communication with Puerto Montt on the mainland. Small coastal steamers also make the port. AKICA & TACNA RAILWAY. Practically all of the privately owned lines in Chile are under British control and management, and nearly all of them have been more or less successful. The most northerly of these lines is the Arica & Tacna Railway, extending from Arica, the port, to Tacna (population 11,759), capital of the Province of Tacna. This railway (British) is about 40 miles in length, was opened in 1875 under a charter given by the Republic of Peru, and cost to construct about $2,200,000 United States currency. The authorized capital is SOUTH AMERICA — CHILE. 235 £500 000, of which £450,000 stock, par £20, is outstanding. Nominal dividends (If per cent each in 1916 and 1917) are regularly paid, the stock selling (January, 1918) at approximately £3 and £4. It was originally expected that this line would sooner or later be ex- tended to La Paz. The construction of the Arica-La Paz Eailway has, however, put an end to these anticipations. The Province has about 45,000 inhabitants, 111 industrial establishments, and 521 mines. NITRATE RAILWAYS CO. In the Province of Tarapaca, to the south of Tacna, is located the important system operated by the Nitrate Eailways Co. (British), which connects extensive nitrate fields with the ports of Iquique and Pisagua. The line was opened in 1869 as a small local line, but has since been extended, the total mileage December 31, 1917, being 390. The gauge is 4 feet 8£ inches. A total of 73 locomotives, 53 passenger- train cars, and 1,794 freight cars were in service December 31, 1915. During the year 1915, 279,054 passengers were carried and 12,839,370 quintals of freight, the latter figure comparing with 18,158,312 quintals in 1914 and 24,023,490 quintals in 1913. In 1916 and 1917 traffic was larger. There follows a table indicating the earnings and profits of the railway for the calendar years 1913 to 1917, inclusive. Figures for 1917 are partly estimated and, although the dividend rate is stated below to be 7 per cent, no final action had been taken up to January, 1918, as to the amount to be paid to shareholders from 1917 earn- ings: Items. 1913 1915 1916 1917o Rate of exchange Gross earnings Expenses Ratio Net earnings Miscellaneous income Net income 5 per cent mortgage bonds: Interest Sinking fund Miscellaneous charges Total charges Net profit ' Expenditure on buildings, sidings, etc Profit for ordinary Ordinary dividend Rate, percent Balance Renewal of rollin g stock account , Balance Brought forward Carried forward Wd. 9Ad. £394, 787 195, 431 (49. 50) £704,026 351, 739 (49.96) 372,829 4,914 263,238 2,807 199, 356 4,928 352, 287 9,807 377, 743 28,442 207,523 12,319 266,045 17, 165 159,982 22,672 204,284 13,347 58,790 40,772 9,101 121,815 43,201 248,284 129,459 11, 478 199,819 66,226 8,664 112,909 91,375 1,776 174, 117 187,977 4,749 117,981 124,200 TO 57,562 41, 400 TO 89,599 82 800 '(5) 183,228 115,920 (?) Dr. 6,219 30,000 Cr. 16,162 Cr. 6, 799 Cr. 67, 308 30,000 Dr. 36,219 79,998 Cr. 16, 162 43, 759 Cr. 6,799 59,921 Cr. 37,308 66,720 43, 759 69,921 66,720 104,028 £800,000 428,000 (53.50) 372,000 10,000 382,000 4,000 79,000 49,000 132,000 4 250,000 5,000 245,000 115,000 (7) 130,000 "Estimated. i Equal to a dividend of over 15 per cent on the shares. 236 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. The quotations for the securities of the company (London Stock Exchange) are indicated as follows: Securities. Amount outstanding Par value. High price since 1911. Price January, 1918. Ordinary shares Preferred converted ordinary Deferred converted ordinary. £1,485,340 170,660 170,660 £10 10 10 15} 13J 5 13} 9i 5 The dividend annually paid by the company is on the entire stock capitalization, the ordinary shares receiving their full proportion of the dividend declared, the preferred converted up to 7 per cent, and the deferred converted the difference between the 7 per cent divi- dend paid on the preferred converted and the dividend paid on the ordinary, in the event that the ordinary dividend exceeds 7 per cent. No dividend was paid on the deferred converted shares in 1915, 1916, or 1917. In 1914, one-half per cent was paid. The ordinary shares are convertible into the two other classes of stock in the pro- portion of 100 per cent of each ; likewise, a holder of one share of each class of converted stock may exchange it for one share of ordinary stock. Formerly this company had outstanding an issue of 5 per cent first-mortgage bonds. These were originally offered in 1888 to the amount of £2,000,000, but have been wholly retired (last bonds paid off in 1917) through the operations of a sinking fund. The Nitrate Railways Co. originally obtained its charter from the Peruvian Government. The concessions of the company expire in 1936, 1957, and 1974, when the various lines revert to the Chilean Government, the territory served being i >v wholly under the lat- ter's control. The company has accumulated considerable reserves and is in excellent financial condition. It is one of the two great nitrate-carrying lines of Chile, and although its traffic is mostly made up of that single product, future prospects may be said to be very good. The company's shares carry voting power as follows: Ordinary shares, one vote; preferred converted, one-third vote; and deferred converted, two-thirds vote per share. ANGLO-CHILEAN NITEATE & RAILWAY CO.— AGUA SANTA RAILWAY. In this district there are two other railways of considerable im- portance^ — the Anglo-Chilean Nitrate & Railway Co.'s line and the Agua Santa Railway. The former railway carries nitrate to the port of Tocopilla. This property usually pays 25 per cent and up- ward per annum (30 per cent in 1917) on the £550,000 ordinary and £350,000 preference shares and 4J per cent on the £347,300 mortgage bonds. The Agua Santa line, owned by the Agua Santa Nitrate & Railway Co., is largely a local enterprise, although there is some British capital interested. Large dividends are paid. ANTOFAGASTA & BOLIVIA RAILWAY. The Antofagasta (Chile) & Bolivia Railway, a large and im- portant British-owned line, terminates at the ports of Antofagasta SOUTH AMERICA CHILE. 237 and Mejillones. This is the largest and most important privately owned railway in Chile, and its career has been a most successful one. The railway (exclusive of the Bolivia Eailway, which is leased) operates 820 miles of main track, 518 miles of which are located in Chile. The capitalization of this international enterprise, as of December 31, 1917, was £10,100,000, of which £6,000,000 was stock and £4,100,000 debentures. Including the Bolivia Railway (leased, as stated) and the Aguas Blancas Railway, the stock of which is owned, approximately 1,250 miles of railway are under the com- pany's control. The Chilean section is at present of 2-foot 6-inch gauge, despite which fact trains are operated at a good speed and with comfort to travelers. A double weekly train service is main- tained between Antofagasta and La Paz, the running time being approximately If days. Additional local trains are also run. The railway's climb begins almost as soon as it leaves the Pacific, the first 20 miles averaging nearly 100 feet rise to the mile. The rail- way crosses the Longitudinal System at kilometer 96, and some traf- fic is interchanged. After leaving this crossing the line enters the nitrate belt, through which it extends for upward of 30 miles. This is the principal source of traffic to the company. At Calama, 148 miles from Antofagasta, the copper belt is reached. Not far beyond this point, on a short branch, are the Chuquicamata copper mines owned by the Chile Copper Co., an American corpo- ration. This company holds a franchise to build a railway to the port of Mejillones, but, because of the satisfactory traffic arrange- ments made with the Antofagasta & Bolivia Railway, this railway will probably not be built at present. The Antofagasta & Bolivia Railway, after leaving Calama, continues to climb into rugged coun- try. At Conchi — kilometer 300, altitude 10,000 feet — is the Loa Via- duct, 336 feet high and supported by six girder spans of 80 feet each in the clear supported on steel trestle towers. At San Pedro, a short distance farther on, are situated the waterworks owned by the railway company, which supplies the city of Antofagasta and the nitrate fields with water. This system cost upward of £1,250,000 to complete. The capacity of the water supply is estimated at 6,000 tons daily. At kilometer 362 the altitude is 13,000 feet, the highest point on the main line. From this point it drops to Cebollar, alti- tude 12,200 feet (kilometer 389) , which is the station for the Ascotan lake of borax, worked by the Borax Consolidated Co. The lake is 24 miles in length, and the borax supply, which may be considered practically inexhaustible, is the largest in the world. Ollague, the frontier town" for Chile, is located near Mt. Ollague, a volcano, exceeding 20,000 feet in height. Some sulphur is mined at the Buena Ventura mine near here, bringing a fair amount of traffic to the railway, and from the station a Tbranch runs to the Collahuasi copper district 60 miles away. This branch climbs to the altitude of 15,809 feet, the second highest point reached by the line (the Potosi branch in Bolivia is 15,814 feet high) , and will probably develop a considerable traffic from these rich mines. The frontier line is 275 miles from Antofagasta, and from that point the railway proceeds to Uyuni, Oruro, and La Paz, with branches to Potosi and Cochabamba. Owing to the fact that the 1916 statistics of the company were not available, the figures for 1915 are here presented. The year's busi- 238 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. ness was far below normal, not comparing favorably with earnings for either 1913 or 1916. Gross results since 1912 have been as follows : Years. Miles operated. Gross results. Years. Miles operated. Gross results 1912 769 795 820 £1,663,935 1,811,775 1,541,995 1915 820 838 838 £1,322,056 1,844,235 2,236,925 1913 1916 1914 1917 The Chilean section (518 miles) earned in 1915 £1,036,025, as com- pared with £1,149,568 in 1914. These earnings were far below the results for 1916 and 1917. Net earnings amounted to £492,096 in 1915 and £486,102 in 1914. A total of 367,280 passengers were car- ried in Chile during 1915, as compared with 447,389 in 1914. The freight tonnage for the section in 1915 amounted to 1,439,990, as compared with 1,457,366 in 1914. The nitrate tonnage was 814,955, of which 459,838 tons went to Antofagasta and 372,129 tons to Mejillones. The copper-ore tonnage was 51,497, an increase of 3,391 tons over 1914. The Chile Copper Co.'s production is increasing, and the earnings from the copper tonnage will probably be much greater in future years. The remainder of the traffic of the railway is made up mostly of ores, etc., from Bolivia and of petroleum, coal, and im- ported merchandise. The earnings from the waterworks for 1915 were £101,475 gross (£111,068 in 1914) and £79,731 net. The dividend record of the company, over a period of 10 years, has been as follows: Securities. 1908 1909 1910 19U 1912 1913 1914 1915 1916 1917 10- year aver- age. 5 per cent cumulative preference. . P.ct. 5 P.ct. 5 P.ct. 5 5 P.ct. 5 5 8 P.ct. 5 5 81 P.ct. 5 6 11 P.ct. 5 5 8 P.ct. 5 5 8 P.ct. 5 5 ■ 8 P.ct. 5 67 6 12 P.ct. 5 5.6 n Vi 8.6 « Entitled to 5 per cent dividends in preference to the deferred ordinary stock and ranking equal with the latter class in all dividend payments in excess of 10 per cent per annum. » Includes 2 per cent in deferred ordinary stock paid June, 1918. During 1916 this railway effected a short-term 6 per cent loan in the United States. These notes were paid off at maturity, July 1, 1918. Its securities may be said to be sound, stable investments. Its shares sell at a high price, and the company's dividend record is an excellent one. AGUAS BLANCAS RAILWAY. The Aguas Blancas Railway, which, as has been mentioned, is con- trolled by the Antofagasta & Bolivia Railway, runs from the port of Calata Coloso, 6 miles south of Antofagasta, to various nitrate prop- erties at or near Yungay, Aguas Blancas, Avanzada, Castilla, etc. The railway parallels the Antofagasta & Bolivia Railway for a short distance and then strikes off in a more southerly direction. The line has been moderately successful. Its £900,000 4£ per cent bonds are listed on the London Stock Exchange and bear the guar- anty of the Antofagasta & Bolivia Railway. SOUTH AMERICA CHILE. 239 TALTAL RAILWAY. The Taltal Eailway, an important line, is the next privately owned system to the south of Antofagasta. The corporation is English. The railway extends from Taltal, a major port located on a bay about 110 miles to the south of Morena Bay (Antofagasta), in an easterly direction to Canchas (25 miles) ; from this point a branch runs northward to Puertazuela and Santa Luisa, where are located important nitrate oficinas (length of branch 26 miles). From Canchas the railway runs in a northeasterly direction, crossing the Longitudinal Railway near the Alianza nitrate oficina and continu- ing to Aguado and Cochinal, approximately 95 miles from Taltal. An important branch extends from Ovalo to Salintas, the latter an important nitrate center. There are also several additional short branches, the total length of the railway system being 184 miles. The maximum gradient of the line is 4.8 per cent and the average gradient about 2 per cent. Nitrate is the principal source of traffic, although a fair passenger and general freight business is handled. Daily passenger service is maintained over most of the line. Most of the locomotives in service burn oil as fuel. The capitalization of the Taltal Railway consists of 900,000 shares, par £5, and £229,000 first-charge 4| per cent debentures, these securities being listed on the London Stock Exchange (see Appen- dix). Dividends during recent years have averaged from 6 to 9 per cent per annum. The port of Taltal, as of December 31, 1916, had an estimated population of 16,277. Facilities at the port are fairly good and the town is a modern one, lighted by electricity and containing a num- ber of important business houses. The Province of Taltal is said to contain considerable undeveloped areas of nitrate lands, gold, silver, and copper ores, and other mineral deposits. Steamers or the Pacific Steam Navigation Co., the Chilean Line, etc., make the port with fair regularity. MINERAL RAILWAY FROM ALGARROBO MINES TO CALDERA. There is a short mineral railway owned by the Comunidad Minera de la Viuda, which runs from the Algarrobo mines to the port of Caldera (see description of Copiapo Eailway, under Government lines) . This line is slightly more than 25 miles in 'length and is not important as a common carrier. The general direction followed by the line is northeasterly. CARRIZAL & CERRO BLANCO RAILWAY. Another important privately owned railway is the Carrizal & Cerro Blanco line. . This railway extends from Carrizal Bajo, a minor port, located 73 miles south of Caldera and 92 miles north of Huasco, inland to Yerba Buena (60 miles), with several branches to important mining centers. Most of the company's business is de- rived from mineral traffic, although there is sufficient passenger traffic to warrant daily service. The total mileage is about 125. The company has outstanding. 1,500,000 paper pesos capital stock of a par value of 500 paper pesos, of which 2,619 shares were held in England at latest accounts and the remainder, 381 shares, in 240 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Chile. Receipts and expenditures during recent years have been as follows : Periods. Expendi- Net tures. earnings. Paper Paper Paper pesos. pesos. pesos. 216,909 146,453 70,456 193,006 141,945 51,061 182,702 124,339 58,363 131,661 137,882 -6,221 July-December, 1913 January-June, 1914 . July-December, 1914 January-June, 1915 . . On various occasions this company has paid moderate dividends to its stockholders. The line is an old one, about 23 miles having been constructed prior to 1864. CHILEAN TRANSANDINE RAILWAY. Best known and least successful among the privately operated lines in the Republic is the Chilean Transandine Railway, forming a por- tion of the only transcontinental line south of the Isthmus of Panama. The Chilean Transandine Railway starts at Los Andes, the western terminus of a branch of the Central of Chile (State) Railway, forming a 43-mile link in the 886-mile system from ocean to ocean. Los Andes, the terminal, is 88 miles from Valparaiso, and here the passengers and freight must change cars owing to the fact that the State line is of 5-foot 6-inch gauge and the Transandine Railway of meter gauge. The altitude here is 2,723 feet. There is a 43-mile trip before the line enters the heart of the mountains to emerge on the Argentine slope. It is a wild and wonderful country through which this railway has been constructed. Cliffs, crags, and deep gorges abound, while there are 25 tunnels and 118 bridges, all across one stream or its tributaries. Twenty miles of rack rail are used, while snow and avalanche sheds are frequently necessary, inasmuch as the railway has to contend with mighty storms that occur with considerable frequency during the winter months, blockades often lasting several months. During the winter of 1916 the line was kept open continuously for the first time in the railway's history. The maximum grade of the line is 8 per cent. The cost of the Chilean Transandine Railway has far exceeded ex- pectations, property and equipment being carried on the books as of June 30, 1915 (figures published June, 1916) at £3,001,670. The company had outstanding on that date £1,400,000 preference shares, £100,000 ordinary shares, and £1,485,000 5 per cent debentures guar- anteed for 20 years from 1903 by the Chilean Government. Thus the capitalization of this line amounts to upward' of $317,000 United States currency per mile (exchange figured at par). Earnings of the line for 1914-15 totaled £23.607 (approximately $2,000 per mile), and there was an operating deficit of £29,066. Interest requirements amounted to £75,000, which sum was advanced by the Government. Freight earnings are very small, most of the business being derived from the operation of the semiweekly international passenger train. Further references to the railway and the 2-mile international tunnel are made in the chapter on Argentina (see p. 53). SOUTH AMERICA — CHILE. 241 RAILWAY OPERATED BY ARAUCO CO. The only other important privately owned railway in Chile is that operated by the Arauco Co., an English concern operating important coal properties located to the south of Concepcion. The line handles about 250,000 tons of coal annually and also does a general freight and passenger business, which averages £15,000 to £20,000 annually. About 62 miles of main line and branches and additional mileage of coal-mining spurs are operated. The railway crosses the River Bio Bio via a bridge approximately 1^ miles in length, the longest bridge in South America. Four daily passenger trains are operated daily in each direction, running between Concepcion, Coronel, Lota, and points beyond. The capitalization of the company consists of £478,000 stock, on which 8 per cent and upward is paid each year; also £481,000 deben- tures and £75,000 5 per cent income bonds. The shares generally sell at a fair premium on the London Stock Exchange and are in favor with investors. SMALL PRIVATELY OWNED RAILWAYS— TRANSANDINE PROJECTS. There are no other important privately owned railways in Chile. From Eancagua, 87 kilometers (54 miles) south of Santiago, the Braden Copper Co. has constructed a line some 70 kilometers (44 miles) in length to its mines. From Collilelfu, east of Puerto Montt, the San Martin Railway, a proposed transandine line, runs to Huidif , 30 kilometers (18.6 miles). From the latter point this company operates a road transportation service to Rinahue on Lake Rinahue, 10 kilometers (6.2 miles), from which landing a steamer runs to Chosuenco, 31 kilometers (19.3 miles). The remainder of the 161- kilometer (100-mile) trip to San Martin is made 43 kilometers (26.7 miles) by road and 49 kilometers (30.4 miles) by steamer. San Martin is on Lake Lacar, Argentina. All of this service, which is maintained weekly, is operated by the railway company. The com- pany originally intended, and still hopes, to continue its line through to connect with the Argentine State Railways running to the Atlantic Ocean. A considerable amount of rough country must be traversed before railheads are connected. There have been put forward no fewer than 15 transandine projects, the majority of these to be located south of the existing line. One of these would involve an extension of the Chilean East- ern Central Railway (which is only partly completed) from the port of Lebu through the coal fields to join the State Railway. The State line would be used from Los Sauces to Curacautin (73 miles) and an extension built through the Lonquimay Pass to join the Neuquen extension of the Buenos Aires Great Southern Railway. The cost of the line is estimated at $15,000,000. Among the small privately owned railways is the line run- ning from Punta Arenas to the Loreta coal mines, worthy of note only because it is the most southerly railway in the world. It is of 2-foot 6-inch gauge. SUMMARY OF RAILWAY SITUATION. As will be seen from the foregoing account, Chile is excellently pro- vided with railways. The important Central System, owned by the 63018°— 18 16 242 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. State, is, of course, the largest of these lines. The Longitudinal Rail- way has been constructed ahead of its time and is largely important as a strategical system. With the acquisition of much-needed equip- ment traffic will increase, and the inflow of population that will prob- ably come to Chile in the not distant future will materially help the line. Lack of cars in service and of certain needed improvements makes it impossible to compete successfully with the numerous coast- wise steamers that make the various ports, and therefore large deficits usually result. Private railway ventures, other than the Chilean Transandine Railway, have returned very substantial profits on sums invested. Chile's railway situation may be said to be excellent. Its present mileage is large and will further increase during the next few years. RAILWAY CAPITALIZATION AND QUOTATIONS FOR SECURITIES. The following table indicates the capitalization, par value of shares, and quotations for securities of the most important privately operated railways in Chile: Names of companies and classes of securities. Amount outstand- ing. Par value. High price since 1911 Price, January, 1918. Antofagasta & Bolivia Railway: Preferred ordinary stock, 5 percent £2,000,000 Deferred ordinary stock 2,000,000 5 per cent cumulative preference stock 2,000,000 4 per cent perpetual debenture stock •.. 1,000,000 4} per cent debenture stock, redeemable 1, 000, 000 5 per cent debenture stock, redeemable 1,500,000 5 per cent Bolivia debenture stock, redeemable 600, 300 Aguas Blancas Railway: Stock °S10,000,000 41 per cent debenture stock £836,629 Aoiglo-Ohilean Nitrate & Railways: Ordinary snares (30percent, 1917) 550,000 Preference shares (30percent, 1917) 350,000 4} per cent consolidated mortgage bonds 347, 300 Arica & Tacna Railway: Ordinary shares 450,000 Arauco Co.: Ordinary shares (lOpercent, 1917) 477,800 5 per cent irredeemable first mortgage debentures 208, 164 6 per cent redeemable second debenture stock 177, 223 5 per cent income debentures .' 75,000 Carrizal & Cerro Blanco Railway: Capital stock <■ $1,500,000 Chilean Transandine "Railway: Ordinary shares £100,000 Preference shares, 6 per cent cumulative 1, 400, 000 5 per cent debentures, "Series A" 278,100 5 per cent debentures, "Series B" 538,650 5percent debentures, "Series C" 668,250 Nitrate Railways: Ordinary shares 1,485,340 Preferred converted 170, 660 Deferred converted 170, 660 Taltal Railway: Ordinary shares (9 per cent, 1917) 900,000 4} per cent first charge debentures 185,100 £100 100 100 100 100 100 100 00 £100 5 5 100 10 100 •100 100 a $100 £100 100 100 100 100 10 10 10 5 100 112 174 110 104 109 115J 113 (') 106 20 20 103 58 m 107 105 95 (*) SI 101 101 101 151 12i 5 91 103 85 133 80 70 81 89 85 C) 19} 191 81 31 12 90 98 78 (») 8 59 60 13} 6 94 « Quoted in Chilean paper currency; par value 100 pesos paper. b Not quoted. PUBLIC UTILITIES. Public-utility developments in Chile have been steady and have attracted a large amount of foreign capital, particularly German and British. Practically all the cities and towns of importance are supplied with fresh water and are lighted by either electricity or SOUTH AMERICA CHILE. 243 gas. There are 34 tramway lines in the Republic, 13 telephone com- panies, and various telegraph systems, operated by the State or pri- vately. The 34 tramway lines operate 254 miles of line (409 kilo- meters) and represent an investment of 56,039.759 paper pesos. During the year 1914 a total of 106,470,230 first-class and 43,926,878 second-class passengers were carried. Gross earnings totaled 13,- 875,681 paper pesos and operating expenses 10,011,366 paper pesos; net earnings amounted to 3,864,315 paper pesos, equal to approxi- mately 6.9 per cent on total investments. A total of 831 cars were in service. The 13 telephone companies maintain 268 offices and employ 1,097 persons. The subscribers number 18,208, and the value of property owned amounts to 11,866,696 paper pesos. The British-owned Chile Telephone Co. is by far the largest competitor in this field. As previously stated, considerable amounts of German capital have been invested in the public utilities of Chile. The Compafiia Ale- mana Transatlantica de Electricidad, which owns the electric-light- ing properties in Buenos Aires, controls the Tranvias Electricos de Valparaiso, operating the tramway lines in Valparaiso and Vina del Mar, through ownership of a large majority of the $5,000,000 (United States currency) stock in the company. The former com- pany also owns a very large interest in the Santiago Electric Light & Tramway Co. This latter company, with a capitalization of £650,000 preference shares and £404,700 ordinary shares, may be said to be an English-German corporation. > Data as to earnings, capitalization, etc., of various public-utility enterprises in Chile will be found in the Appendix (see p. 512). Among the prominent companies in the field may be mentioned the Tarapaca Waterworks Co., an English concern, operating the water system of the city of Iquique; the Valparaiso Drainage Co. (Ltd.), holding a concession to lay and maintain the sewerage system of the city of Valparaiso (a British company) ; the Chile Telephone Co.; the Cia. General de Electricidad Industrial, with the lighting and power privileges of the small cities of Eancagua, Temuco, Chilian, Curico. Lo Bravo, and San Fernando, located in south-central Chile; the Santiago Gas Co., a local concern; the San Bernardo Electric Tramways, suburban to Santiago ; the Valparaiso Gas Co. (local) ; the Commercial Telegraph Co., etc. The gas companies operating in Valparaiso and Santiago have been very successful and have paid substantial dividends. The shares of both of these companies are quoted in the local markets at upward of par. In the northern zone of Chile public-utility development has made fair headway. Most of the towns and cities have fairly good water, although this usually has to be brought from a considerable distance, in most instances from high in the Andes. The gas works in Arica represent an investment of approximately 245,000 paper pesos ; the port is lighted by electricity. Tacna is lighted by electricity. Pisa- 'gua, the next place of importance to the southward, is lighted by paraffin or acetylene. Iquique, which has reached considerable size and importance, is well lighted by electricity and has a good tramway system. As previously mentioned, the Tarapaca Waterworks Co. 1 'This company has a capitalization of £240,000 shares, par £6. Dividends have been at the rate of 8 per cent per annum for a number- of years. The net profits for 1917 were £45,861. 244 INVESTMENTS IN LATIN AMEEICA AND BEITISH WEST INDIES. furnishes the water supply ; this water is brought from Pica, in the mountains, a distance of 88 miles. Mejillones has rather inadequate lighting facilities, while Antofagasta has its local electricity plant, controlled by a company headed by the firm of Mitrovitch Bros., an important local concern of Russian origin. The drinking-water supply is furnished by the Antofagasta & Bolivia Eailway, which has laid a pipe line from its collecting stations (blasted out of solid rock), located at San Pedro Station, 195 miles from Antofagsta. This water-supply reservoir, pipe line, etc., cost more than £1,250,000 and has paid a substantial return. A large portion of the nitrate district depends on this company for its water supply. Some of the springs are located at an altitude of 14,500 feet. Formerly Antofa- gasta had a street-car line, on which cars were drawn by horses. Several years ago. when the streets of the city were paved, this line was abandoned and the tracks torn up. At present the city, which has a population of more than 75,000, depends on a service of auto- mobile omnibuses. As the area of the city is not great, this service is probably sufficient for its immediate needs. The construction of an electric traction line has been agitated and its possibilities looked into by various interests, including one American public-utility con- cern, but thus far nothing has been accomplished. Taltal, the second town in importance in the Province of Antofa- gasta, has electric lights furnished by a local company. The power station is owned by the Taltal Eailway, a British company. Water has to be brought from a point in the mountains, a considerable dis- tance away. Total investments in electric light and power properties in the Province of Antofagasta amount to 1,782,000 paper pesos. Atacama, the next Province to the southward, contains no cities of any size other than Copiapo (population 11,056), located 50 miles inland from the port of Caldera. This former town is lighted by gas, the company furnishing the light having originally been formed by William Wheelwright, founder of the Pacific Steam Navigation Co. and builder of the first railway in Chile. Coquimbo, the next Province to the southward, contains two cities of importance, Coquimbo (population 17,622) and Serena (popu- lation 16,149), and the town of Ovalle (population 8,311). Co- quimbo is lighted by gas, and Serena has both gas and electricity. The electric company operating in Serena has an invested capital of 215,000 paper pesos. Aconcagua, located to the eastward of Valparaiso, contains the growing cities of Los Andes and San Felipe, as well as several towns of moderate importance. San Felipe has a street railway — the cars being drawn by horses — and a lighting system. Los Andes has elec- tric lights, power being obtained from the Aconcagua River, flowing from the mountain heights. In Aconcagua Province a total sum of 434,000 paper pesos is invested in electric lighting (one company) and 88,000 paper pesos in the gas plant. Mention has been made of the various public utilities in Valparaiso and Santiago. It is stated that 5,547,224 paper pesos is invested in the two gas plants in the city and Province of Valparaiso (mostly in the Gas Co. of Valparaiso) and 9,000,000 paper pesos in the Gas Co. of Santiago. SOUTH AMERICA CHILE. 245 O'Higgins Province contains the city of Rancagua (population 15,830). The Companfa General de Llectricidad Industrial, pre- viously mentioned, furnishes light and power for Rancagua. The capitalization of this company is 1,500,000 paper pesos, of which 262,056 pesos is invested in the Province of O'Higgins. The same concern furnishes the lighting for the city of San Fernando (popu- lation 10,869) , capital of the Province of Colchagua, and for Curico (population 22,452), capital of the Curico district. In Talca Province, farther to the southward, there is one electric company with a capitalization of approximately 387,000 paper pesos and an important gas works and system representing an investment of 1,052,834 paper pesos. Talca, the only city of importance, has a population of 42,088. Concepcion, which has attained considerable importance, has elec- tric traction service, which connects the city with the port of Tal- cahuano, 9 miles distant. The city is lighted by gas and electricity. Public-utility enterprises also exist in several of the larger cities and towns to the southward, including Valdivia, Chilian, Temuco, and Punta Arenas. In the last-named city the Magallanes Tele- phone Co. has a capital of £60,000. Undoubtedly there are opportunities in Chile for further public- utility development, particularly in modernizing some of the sys- tems in certain of the small cities and towns and, in a few instances, in the construction of sewerage systems and filtration plants. Like- wise there are prospects for interests well provided with capital to take over and consolidate various undertakings now in operation, forming holding companies similar to those operating in the United States. During the past two or three years certain banking and public-utility interests in the United States have partially investi- fated the field, although thus far practically nothing has been done, o date, other than the loan made by the Guaranty Trust Co. of New York to the Valparaiso Water Board, which is in reality a municipal enterprise, run by city and nation, no capital from the United States has gone into Chilean public utilities. It is a note- worthy fact that the shares of practically all the public-utility con- cerns listed on the local stock exchanges sell at a considerable premium. MINERALS AND METALS. Mining is to-day and will for many years continue to be the" prin- cipal source of wealth in Chile. Almost every known variety of mineral exists in the Republic, and many of these are mined on a large scale. Chilean mining laws are liberal and all nationalities have the right to acquire claims. The general rights include the use of as much land as is necessary for the exploitation and survey of the mine, the erection of all necessary buildings, the laying out of roads and trails, the use of necessary water, timberland, arid pas- ture. A small sum is payable to the Government as rental for each claim. As of January, 1916, the mining claims in force were as shown on the succeeding page : 246 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Minerals. Num- ber of claims. Minerals. Num- ber of claims. Minerals. Num- ber of claims. Gold 2,584 12,049 605 706 2,065 1,394 109 2,351 605 2,041 Coal 129 378 Silver 451 Potassic salts (nitrates) . . 1,398 The total number of claims in force in January, 1916, was 28,704, as compared with 28,541 in January, 1915. The production of minerals, metals, nitrates, etc., in Chile during 1915 amounted to the following: Minerals. Quantity. Value in gold pesos of 18d. Minerals. Quantity. Value in gold pesos ofKd. Gold grams . Silver do . . . Copper ore kilos . Iron ore metric tons. Lead ore kilos. Zinc ore do... Molybdenum ore do . . . Tungsten ore do. . . Coal metric tons. Nitrate do... 1,335,524 40,445,061 52,340,959 147, 100 44,270 5,760 2,044 8,560 1,171,564 1,696,877 813,485 1,006,237 44,287,340 2,942,000 1,596 3,129 5,110 76,500 29,289,100 201,858,465 Iodine kilos. Borate metric tons. Common salt do... Sulphur do . . . Clay do... Lime do... Gypsum do. . . Guano ..do... Miscellaneous do. .. 708, 858 14, 869 30,266 9,769 14,425 52,242 4,700 11,944 1,700 11,738,694 2,081,660 1,059,309 1,172,280 144,250 783, 530 141,000 477,760 64,950 Dividing the minerals into three general classes, the production and the amount exported during 1915 were as follows : Minerals. Production, in gold pesos of 18d. Exporta- tion, in gold pesos ofl8d. Metallic substance s : Gold, silver, copper, iron ore, tungsten ore, etc Fuels: Coal Salts and nonmetallic substances: Nitrates, iodine, sulphur, salt, borates, lime, clay, guano, etc Total 49,142,847 29,289,100 219,514,448 49,806,618 4,624,050 246,674,881 297,946,395 301,105,649 In 1917 the value of the mineral production in Chile was 491,308,- 714 gold pesos, of which 40 per cent was produced by Chilean com- panies and 60 per cent by foreign companies (27.8 per cent British, 12 per cent American, 9 per cent German, etc.). The various branches of the mineral industry will be discussed in succeeding paragraphs. The mineral wealth of Chile has attracted large amounts of foreign capital, particularly capital from the United States and Great Britain. In the nitrate industry British and Chilean companies hold at least 90 per cent of the developed properties, the division being about equal, and the remainder is mostly held by German and North American companies. The United States is taking increased interest in the field, the Dupont Nitrate Co. having acquired various properties, on which extensive development work has been begun. Other American interests have recently been looking over important fields to the southeast of Antofagasta. American investments in copper mines are very large, particularly SOUTH AMERICA — CHILE. 247 those made by the Chile and Braden copper companies. The Bethle- hem Steel Co. has acquired the most important iron properties in the Republic and American capitalists are looking into various other branches of mineral development. NITRATES. The nitrate industry in Chile showed results during the year 1916 such as were never before attained. The total production for the year was 63,323,770 Spanish quintals (of 101.41 pounds), equal to 2,905,627 metric tons, the monthly average being 5,276,926 quintals, or 242,136 tons. The year 1917 showed a still further increase (though a relatively small one), the production being approximately 65,100,000 quintals. The production month by month during 1916 was as follows : Months. January. February March... April Spanish quintals (of 101.41 pounds). 5,641,671 5,291,841 5,457,414 5,337,592 Months. May... June . . . July . . . August Spanish quintals (of 101.41 pounds). 3,353,913 5,163,700 6,312,776 5,396,981 Months. September October... November. December. Spanish quintals (of 101.41 pounds). 4,726,102 5,242,701 5,082,805 5,326,823 The annual production since 1891 has been as follows : Years. Metric tons. Years. Metric tons. Years. Metric tons. 1891 771,915 843,714 972,618 1,121,815 1,302,459 1,095,689 1,166,774 1,316,361 1,398,171 1900 1,476,117 1,289,470 1,355,894 1,467,667 1,540,604 1,733,799 1,800,537 1,824,146 1,947,603 1909 2,085,929 2,436,181 2,491,129 2,555,188 2,739,381 2,434,284 1,696,877 2 905 627 1892 1901 1910 1893 1902 , 1903 1911 ..... 1894 1912 1895 1904 1913 .. 1896 1905 1914 1897 1906 1915 .. 1898 1907 1916 1899 1908 The production of 1916 exceeded the 1913 production, which pre- viously held the record, by 166,246 tons (3,657,412 quintals). The amount of nitrate exported during 1916 was 64,899,115 quintals, 1,575,345 quintals in excess of the production. During the eight-year period 1907 to 1914 the world's consump- tion of nitrate increased from 1,738,680 tons to 2,708,968 tons. No authentic figures for a later date are obtainable, owing to the fact that the data from several of the warring nations of Europe can not be procured. The nitrate industry of Chile, which during the year 1913 had reached unprecedented prosperity, was thrown into serious disor- ganization at the outbreak of the war. A number of oficinas were compelled to shut down and nearly all the companies in the field were compelled to reduce or suspend dividends. The return of business was almost as sudden as the crash that preceded the short-lived de- pression, and during 1916 most of the oficinas earned record sums. The rush of producers to reopen their plants, following the- return 248 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. of the demand for the product, caused a widespread demand for labor, and this problem was solved with difficulty owing to the fact that thousands of workmen had left the barren districts and scattered throughout southern Chile. Mules, which had been sent by hundreds to southern pasture lands, had to be shipped north and many prob- lems were encountered. Whether the present prosperity in the indus- try will continue after the war is problematical. However, there will certainly be a demand for the product to replenish the over- worked lands of Europe, following the close of the war, and this insures a considerable demand for a time, at least, although it is ques- tionable whether the amount needed for creative purposes will equal that now used for destructive purposes. Statistics follow showing the number of nitrate oficinas in exist- ence, the number working, and the number of employees: Years. Oficinas in exist- ence. Oficinas working. Number of work- men. 1913 169 170 171 172 172 127 137 116 116 124 53,161 43, 979 1914 1915 45,506 1916 1917 A total of 192,362 tons of coal and 305,919 tons of petroleum were used as fuel during 1915. In 1913 the totals were 488,454 tons and 377,059 tons, respectively. Of the 87 firms in the field in 1914, 51 were Chilean, 32 British, 3 German, and 1 American. A small number of the British con- cerns were partly financed by German interests. In the nitrate pro- duction for 1917 the Chilean companies accounted for 39.85 per cent, the British for 36.10 per cent, and the German for 12.24 per cent. Shares and debentures of 21 of the nitrate companies under Brit- ish control are actively quoted on the London Stock Exchange, their total capitalization amounting to nearly £9,000,000. These com- panies, during past years, have been generally successful, so that nitrate shares on the London Stock Exchange have come to be a much- sought form of investment. The following figures, relating to important nitrate companies, are for the years ended June 30 : Name of company. Net profits. Dividends, ordi- nary and pre- . ferred. To reserve, etc. Carry forward. 1915-16 1916-17 1915-16 1916-17 1915-16 1916-17 1915-16 1916-17 £49,412 19, 837 4,270 103,414 46, 594 1,384 19, 257 £43, 109 15,023 32,623 107,819 44,097 6,526 18,338 £13,820 8,000 £13,920 8,000 £32,197 7,500 5,027 50,000 22,500 £32, 847 8,277 32,623 42, 159 20,000 £3,721 1,548 £63 48,280 24,000 68, 160 24,000 11,445 8,463 6,740 325 10,549 15, 800 15, 800 1,956 2,470 '393 Total 244, 168 267,535 11(1 nnn 129,880 119, 180 138,376 32,242 33,035 SOUTH AMERICA CHILE. 249 From the following summary of the principal items of the balance sheets it will be seen that there has been a general increase in stocks : Name of company. Share capital. Deben- tures and loans. He- serves. 'Proper- ties. Stocks. Cash and bills. 1915-16 1916-17 1915-16 1916-17 £200,600 160,000 550,000 56,800 160,000 110,000 79,000 £126,900 30,373 394,380 £37,500 £333,656 163,391 849,698 117,865 260,397 125,266 54,694 £205,942 36,315 27,823 101,413 33,413 15,256 17,569 £253,478 42,555 74,897 115,901 50,822 26,445 26,150 £105,897 30,477 124,374 61,089 63,282 49,588 14,725 £166,770 28,515 68, 197 71,519 138, 155 29, 131 18,000 159,980 60,770 84,137 59,770 7,641 The Eosario Nitrate Co., at its annual meeting held April 11, 1917, declared a dividend of 11£ per cent, as compared with 1\ per cent paid the previous year. A number of the Chilean concerns engaged in the nitrate business have earned large profits during the recent period of prosperity. There has been heavy trading on the Valparaiso and Santiago Stock Exchanges in this class of securities, and there has been a pronounced advance in nitrate shares. The following table will indicate the quotations on the ordinary (common) shares of a number of the leading nitrate companies whose shares are listed on the London Stock Exchange and on the local " bolsas " of Valparaiso and Santiago : Companies. Par value. Approxi- mate quo- tations." Companies. Parvalue. Approxi- mate q iio- tations.a LISTED ON LONDON STOCK EXCHANGE. AguasBlancas Alianza Angela Anglo-Chilean Railway & Nitrate Co Colorado Lagunas Lagunas Syndicate Lautero Liverpool London New Paccha 4 Jazpampa New Tamaragul Pan de Azucar Rosarlo Salar del Carmen San Lorenzo English currency . £1 5 1 5 5 5 1 5 (5s.) 1 1 1 5 5 1 1 English currency. £2 W li 19} 4i l| 11 (77s.) 2! 3 H H 31 LISTED ON LONDON STOCK exchanges — continued. San Sebastian Santa Rita Santiago Tarapaca & Tocopilla LISTED ON CHILEAN STOCB EXCHANGES. Antofagasta Loa .- El Boquete Agua Santa Lastenia La Union Cast ilia Perseverancia English currency. 1 1 4 1 English currency. 1 Chilean paper pesos. 150J 6 51 »80 Bank of Peru and London is controlled by Peruvian, French, and -.ritish capitalists. It is the oldest and largest bank. In addi- tion to the main office at Lima (a palatial structure), 15 branches have been established throughout the Republic, these being located at Iquitos, Piura, Chiclayo, Pacasmayo, Trujillo, Huares, Huacho, Callao, Cerro de Pasco, Mollendo, Arequipa, Cuzco, and elsewhere. The capitalization of the bank, as stated, is Lp500,000. Dr. Manuel V. Villaren is president and Mr. J. Payen director general. The Caja de Ahorros is a savings bank'and does not handle an ordinary commercial business. The bank pays 4 per cent on six months' deposits and 6 per cent on yearly accounts. This is purely a local institution, with headquarters at Lima. The Italian Bank, with a capital of Lp200,000, has its principal office at Lima. Branches have been established at Callao, Arequipa, Chincha Alta, and Mollendo. The bank is of Italian origin, its Italian correspondent being the Banco Commerciale Italiano. Profits for the year 1915 were $81,460 United States currency. The International Bank of Peru, one of the smaller institutions (capital, Lpl00,000) , showed a profit of $18,698 in 1915. Profits were larger during 1916, as was reflected by a dividend increase from 4 to 4£ per cent. The Popular Bank, in its statement, also indicated increased pros- perity, paying 7 per cent in 1916 on Lpl50,000 stock, instead of 5 per cent, the rate paid during 1915. The authorized capital of the bank is Lp200,000. The Popular Insurance Co. is largely controlled by this banking institution and pays annual dividends of 8 per cent on Lp200,000 stock. The German Transatlantic Bank is indirectly a branch of the Ger- man institution with a similar name. The parent organization has a capitalization and reserves of 39,500,000 marks. The local institu- tion is established at Lima, Arequipa, and Trujillo. The bank has a wonderful credit-rating system and prior to the war handled a very large international business. The Bank of Deposits and Consignments is the official govern- mental depository. Its profits during 1915 were $81,251. As a final word it may be said that the general banking situation in Peru at the present time is excellent, reflecting the steady improve- ment in business and financial conditions throughout the Republic. 326 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. INSURANCE COMPANIES. Peru has at present eight insurance companies of recognized stand- ing. The capitalization and dividend record of six of these com- panies are shown in the table on p. 343. There are no foreign com- panies operating in Peru at the present time, despite the compara- tively large profits earned by the various companies now in the field. The Eimac and the International companies have been the largest in the field until recently, and are likewise the oldest, having been founded in 1896 and 1895, respectively. The Rimac company has a capitalization of Lp250,000 and the International Lp200,000. Divi- dends paid by the Eimac company have varied from 30 to 35 per cent per annum (1913 to 1916). In August, 1916, the Urbana Insurance Co. and the Insurance Co. of Peru were consolidated as the Com- panias Unidas de Seguros with a capitalization of Lp500,000, which is the largest capitalization of any of the companies in the field. The Italia Insurance Co., closely affiliated with the Italian Bank, was established in 1896; the Popular and the National companies were established in 1904, the former having a capitalization of Lp200,000 and the latter of Lp250,000. El Porvenir, the shares of which are not listed, is capitalized at Lpl00,000. Pedro D. Gallagher is presi- dent and Dr. Javier Prado y Ugarteche is vice president. The head offices of all these companies are at Lima. None of the insurance companies domiciled in the United States have entered the Peruvian field. The dividend records of the various companies in the field indicate its attractiveness. RAILWAY DEVELOPMENT. Peru has unusually liberal laws to encourage railway building, and is very anxious to grant privileges to interests financially able and willing to carry out construction enterprises leading to the development of the country. Concessions will be granted either perpetually or for a long term of years, usually with renewal privi- leges, and it is usually stipulated that the lines shall be free from competition during a certain period. Material may be imported free, taxation is exempted, and employees are free at all times from mili- tary duties. The Government has assigned certain taxes and revenues for use in subsidizing railway construction. Despite this fact, however, such construction has been slow in the extreme. Scarcity of population, roughness of country, high cost of fuel and materials, and other causes have combined to check the development in this field. Such lines as have been completed thus far are of a variety of gauges, each individual line serving a district of its own and usually terminating before reaching the slope of the mountains. Only two lines strike from the coast into the mountains. These lines — the Central Railway of Peru and the Southern Railway of Peru— will be discussed here- after. Aside from these two lines, there is only one railway of impor- tance in the mountains, namely, the Cerro de Pasco Railway, which connects with the Central Railway of Peru at Oroya and runs to the Cerro de Pasco mines and beyond. There are no railways at present leading down the eastern slope of the mountains, where great varie- SOUTH AMERICA — PERU. 327 ties of tropical wealth exist. Many lines have been projected, usu- ally to connect with the headwaters of the Amazon Kiver. Thus far, with the exception of a few surveys, nothing has been done, although at the present time one section of eastern Peru is within reasonable distance of the Southern Eailway at Cuzco. The projected line from Cerro de Pasco to the Rio Ucayali (see p. 333) will probably be the first railroad built into the eastern territory. One glance at the map of Peru will reveal the lack of railway development throughout the country. The present railway mileage (less than 2,000 miles in operation) is mostly under the control of the Peruvian Corporation, financed with British capital and incorpo- rated in 1890 in the interests of the holders of the external debt of Peru. The history of this corporation is a somewhat familiar story, and will not be repeated here. -The concession granted by the Gov- ernment following the carrying out of certain undertakings on the' part of the corporation contained, among others, the following clauses : All State railways operated at time of concession shall be leased to the corporation until 1956 without rental, and thereafter for 17 years upon payment by the corporation to the Government of one-half of the net surplus after bond service. An annuity of £ 80,000 ($389,325) to be paid for 30 years after July 1, 1907 (as amended), being specially chargeable to the national sugar tax created in 1904. CAPITAL AND INVESTMENTS OF PERUVIAN CORPORATION. The total capitalization of the Peruvian Corporation as of June 30, 1916, consisted of (1) £4,975,450 ($24,213,025) debentures bear- ing interest at 4 per cent fixed and 2 per cent dependent on income ; (2) £7,500,000 ($36,498,750) 4 per cent cumulative preference shares, on which upward of 82 per cent in back dividends remained due as of June 30, 1916; (3) £9,000,000 ($43,798,500) ordinary shares, par £1 ($4.87) . The first-mortgage debentures are quoted at 83£ per cent, and the preference and ordinary shares at approximately 25 per cent and 5 per cent, respectively. The following table shows, in pounds sterling and equivalent American currency, the result of the working of the railways and steamers (on Lake Titicaca and the River Desaguadero) for fiscal years ended June 30 : Net receipts. Fiscal years. Net receipts. Fiscal years. Pounds sterling. U. S. cur- rency. Pounds sterling. U. S. cur- rency. 1890-1 £91, 772 103, 482 200, 759 244, 914 468,693 {446,600 503,600 977,000 1,191,875 2,280,900 1911-12 £435,552 438,502 449,259 241,525 370,361 12,119,600 2,133,975 1895-6 1912-13 1900-1901 1913-14 1905-6 1914-15 1,175! 375 1,802,350 1910-11 1915-16 It is stated that earnings for 1916-17 were far in excess of the 1915-16 total, indicating larger dividend returns on the preference shares. 328 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. The balance sheet of the Peruvian Corporation as of June 30, 1916, stated that the cost of the various properties and concessions acquired under or in connection with the contract for conversion of the Peru- vian debt amounted to (net) £12,772,305 ($62,156,425) ; value of shares and stocks in the Peruvian Central Railway (£1,333,327, or $6,488,- 625), the Southern Kailway of Peru (£2,224,800, or $10,827,000), etc., amounted to £4,251,513 ($20,690,000); expenditures in respect of reconduction and extension of the railways totaled £4,859,692 ($23,- 649,700) ; cost of Guaqui-La Paz Railway, £396,320 ($1,928,700) . The total investment, including certain additional holdings, amounted to £23,204,844 ($112,926,375). There follows a- brief description of the various railways under control of the Peruvian Corporation : PERUVIAN CENTRAL (OROYA) RAILWAY. The Peruvian Central Railway, which bears the distinction of being the highest and most remarkable line in the world, was par- tially constructed some 40 years ago by an American, Henry Meiggs. The main line extends from Callao and Lima via Oroya to Huancayo. The Callao-Oroya section in the short distance of 106 miles reaches the remarkable altitude of 15,665 feet at Galera Tunnel, cut through the Continental Divide. A branch (10 miles) extends from Ticlio to the mines at Morococha, this branch reaching an altitude of 15,865 feet, the highest point reached by any railway in the world. The maximum gradient on the main line is approximately 4 per cent. No rack or cog rail is used, the sierras being surmounted by means of a series of 16 switchbacks. The rails are of an average weight of 70 pounds to the yard, the gauge being standard (4 feet 8£ inches). There are 57 tunnels 1 on this section, one of these tunnels exceeding three-quarters of a mile in length. All locomotives use oil as fuel; most of these locomotives and a large proportion of the pas- senger and freight cars are of American construction. The approxi- mate mileage, including the Ancon branch, not heretofore mentioned; is 249 miles. Gross receipts for. 1915-16 amounted to £502,436 ($2,445,100), as compared with £361.837 ($1,760,875) in 1914-15. Net receipts amounted to £222,014 ($1,080,425). The number of pas- sengers carried in 1915-16 was 2,342,093, against 2,300,606 in 1914-15. The amount of freight handled, including 311,038 tons of minerals, totaled 552,743 tons, an increase of 177,631 tons. Mr. J. H. Feehan, Lima, Peru, is the general manager. The company handles a large local passenger business between Callao, Lima, and Chosica and between Lima and Ancon. Half- hourly train service is maintained between Lima and Callao, and despite competition from interurban tramway lines the trains are heavily patronized. Through service to Oroya is maintained tri- weekly, connections being afforded with the Cerro de Pasco Railway running to the Cerro de Pasco mines, 83 miles from Oroya. Tri- weekly service is likewise maintained between Oroya and Huancayo. Terminal facilities at Callao and Lima are excellent. 'There are on the entire line 65 tunnels ana 67 bridges, many of which are marvels of construction. As an engineering feat this railway has never been duplicated. SOUTH AMERICA PERU. 329 SOUTHERN RAILWAY OF PERU. The Southern Railway of Peru was also a product of the genius of Henry Meiggs, having been planned and partly constructed by him and, as in the case of the Peruvian Central Railway, completed by Henry Thorndyke, an American. The railway has its Pacific terminal at the port of Mollendo, which, unfortunately, is hardly more than an open roadstead. After a run of about 15 miles along the seashore and flat coastal country the railway begins its climb. At a distance of 107 miles from Mollendo, Arequipa is reached, the altitude at this point being 7,550 feet. Crucero Alto, the highest point of the line (altitude 14,688 feet) , is 117 miles beyond Arequipa ; the line then descends gradually, the altitude at Puno, the port for Lake Titicaca, being 12,535 feet. The total distance from Mollendo to Puno is 326 miles.' From Juliaca, 30 miles from Puno, the Cuzco division strikes off northward for 210 miles. The highest altitude on this division is 14,153 feet. It is believed that at no distant date this division will be linked with the Peruvian Central Railway. From Puno the company runs steamers across the lake, connecting with through trains to La Paz, Bolivia. The gauge of the Southern Railway is 4 feet 8J inches; the rails average 60 to 80 pounds to the yard. The passenger fare from Mollendo to Arequipa is $3 gold and to Puno $10, slightly less than 3 cents a mile. From Juliaca' to Cuzco the fare is $8.10, equal to about 4 cents a mile. Four or five trains a week are operated between Mollendo. and Arequipa, semiweekly trains continuing from the latter point to Puno and Cuzco. For the year ended June 30, 1916, the gross earnings of the South- ern Railway amounted to £256,194 ($1,246,775), compared with £231,634 ($1,127,250) in 1914-15. Gross earnings during 1912-13 reached a total of £356.674 ($1,735,750). Net earnings during 1915- 16 were £80,788 ($393,150); in 1912-13, £132,967 ($647,075). The total number of passengers carried in 1915-16 was 208,418, compared with 587,818 in 1912-13, and 622,617 in 1911-12. This very large decrease is due to local tramway competition adjacent to Arequipa and to the completion of the Arica-La Paz Railway. Freight ton- nage during 1915-16 amounted to 125,734 tons, this class of traffic being likewise affected by competition arising from the completion of the Arica-La Paz Railway. Most of the cars in use are of Ameri- can manufacture. A total of 526 miles of main track are operated, this being the longest railway line in the Republic. Approximately 635 miles of extensions are planned. The Lake Titicaca steamship line earned gross during 1915-16 £22,656 ($110,250), contrasted with £63,967 ($311,300) in 1912-13, this very heavy decrease having been caused principally by the com- petition on through business resulting from the completion of the Arica-La Paz Railway. There were 8,400 passengers carried during 1915-16. The Guaqui-La Paz Railway in Bolivia, with which the Lake Titicaca steamers connect, is owned by the Peruvian Corpora- tion Its gross earnings for 1915-16 were £42,470 ($206,675). and net earnings £10,152 ($49,400). In 1912-13 the gross earnings totaled £87,921 ($427,875). 330 INVESTMENTS IN' LATIN AMERICA AND BRITISH WEST INDIES. TRUJILLO RAILWAY. The Trujillo Railway, approximately 75 miles in length, extends from the port of Salaverry via Trujillo' and Chocope to Ascope. The line is of 3-foot gauge, 30 to 48 pound rail, constructed without meet- ing difficult grades, and equipped largely with American rolling stock. The terminal at Salaverry adjoins a mole 1,200 feet in length. A very large business is handled at the port despite the fact that it is Iittie more than a rough, open roadstead. Sugar is the principal commodity, the railway carrying 104,883 tons in 1915-16 and a still larger amount in 1916-17. The total freight tonnage of the railway for 1915-16 was 179,978 tons; 532,546 passengers were transported. Gross receipts for 1915-16 amounted to £66,118 ($321,750), com- pared with £51.505 ($250,650) in 1914-15. Net receipts for 1915-16 were £27,199 ($132,375). There are four passenger trains daily in each direction between Salaverry and Trujillo and a regular tri- weekly service between Trujillo and the sugar country in the interior. It is anticipated that the earnings of this line will suffer somewhat following the construction of a railway from the sugar lands to the port of Malabrigo. A mole is to be constructed at the latter port, which is much better situated than Salaverry. The agricultural areas adjacent to the Trujillo Railway are very fertile, and the country is capable of great development. For several years an exten- sion of the line has been projected to climb high into the mountains, reaching the plateau at an elevation of about 12,900 feet. The line would pass through extensive coal fields located at Huayday and would reach the silver and copper mines at Querivilca. The maxi- mum grade for this line would be 6| per cent, and the cost fairly high. While this line is certain upon completion to secure a large amount of mineral traffic, its construction will probably be delayed, at least for the present. PAITA-PIURA RAILWAY. The Paita-to-Piura Railway is a 60-mile line, equipped with American rolling stock, extending from the port of Paita, in north- ern Peru, to Piura (population 10,000), located some distance inland. The construction cost of the line, completed in 1884, was approxi- mately $1,800,000. Forty-four-pound rails are used, and the maxi- mum gradient is about 2.55 per cent. Gross receipts for 1915-16 were £33,278 ($161,950), and net receipts £14,462 ($70,375); 51,940 tons of freight -were handled and 116,480 passengers were trans- ported. Five passenger trains are maintained weekly in each di- rection. The freight consists mostly of cotton, the territory, largely undeveloped, being highly suitable for the growth of that product. Calacoas (population 20,000), a few miles inland from Piura, is an important center for the manufacture of panama hats, nearly 300,000 being made annually. Large areas of oil and sulphur lands are located near by. An extension to follow the Rio Piura to Catacaos is projected. The distance slightly exceeds 6 miles. There is at present a 3-foot-gauge line, the Piura-to-Catacaos Railway, connecting the two cities. An extension of this line to the town of Morropon has been surveyed. The existing line is laid with 24-pound rails and is suitable only for light traffic. It cost approximately $28,000 to build (6£ miles), and is owned locally. SOUTH AMERICA — PERU. 331 A railway 450 miles in length has several times been surveyed, to extend from Paita to Calantura or some point from which the Maranhao River is navigable. The line would cross the cordillera at an altitude of about 7,000 feet. From the Maranhao Eiver navi- gation for steamers is possible to the Amazon River and ocean ports. The construction of the line would greatly shorten the distance be- tween the West Coast of South America and Europe and would open some extremely rich country for development. In the event of the construction of the line the Peruvian Corporation will doubtless operate it. PACASMAYO-GUADALUPE RAILWAY. The Pacasmayo & Guadalupe Railway is 63J miles in length, con- necting the port of Pacasmayo with the towns of Guadalupe and Chilete. The port is provided with a pier 2,500 feet long, the har- bor being scarcely better than an open roadstead. There is a daily service of passenger trains between Pacasmayo and Guadalupe, be- yond which latter point only fortnightly service is maintained. The railway originally extended to La Vina, 11 miles beyond Chilete, but the track was washed away some years ago. In order to make the section beyond Guadalupe pay the line should be carried on to Mag- dalena, 25 miles beyond Chilete, and thence to Cajamarca, on the summit of the cordillera. Such an extension is contemplated, but in order to avoid floods the line must be located over a route subject to very severe grades; The gross earnings of the Pacasmayo & Guadalupe Railway for 1915-16 were £22,564 ($109,800), and the net earnings £7,086 ($34,475). Passengers numbered 134,722; the freight handled amounted to 30,476 tons and consisted chiefly of rice and fruit. The gauge of the line is 4 feet 8£ inches, and the equipment is mostly of American make. CHIMBOTE RAILWAY. Chimbote, universally spoken of as the best harbor in Peru, is the terminus for the meter-gauge Chimbote Railway, which extends to Tablones, 36 miles inland. The line was opened for traffic in 1872 and was later partially washed away. Following its repair it was operated by the Peruvian Corporation. Earnings are very small, usually less than expenses. In 1915-16 gross receipts totaled £4,458 ($21,700) and net receipts were £300 ($1,450), as compared with a loss of £879 ($4,275) in 1914-15. The continuation of this line inland to Recuay, 100 miles beyond, has long been discussed, the plan being to develop extensive areas producing coal of a quality suitable for briquetting. Conflicting reports concerning the quality of this coal have been published, but it has been claimed that methods exist whereby the product may be made marketable. The coal field was once held under option by the Pennsylvania Railroad. At the present time the small amount of freight handled is derived mainly from sugar plantations belonging to the Peruvian Sugar Co. and from products of a large estate known as Tambo Real. Only one train a week is operated in each direction, the whole future of the property depending on such traffic as may in time be developed from interior points. An extension under different ownership from 332 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Tablones inland toward the Recuay coal fields was partly completed for a distance of about 30 miles (to La Limena) and opened for a small amount of provisional traffic several years ago. It is esti- mated that an expenditure of $10,000,000 gold would enable any possible purchaser to acquire the present railway mileage and port concession, build the necessary extension, and open the coal fields for development. The altitude at Recuay is about 11,000 feet, and certain fairly heavy grades would have to be surmounted. Beyond this point surveys have been made indicating that it would be pos- sible to build a link to connect with the Cerro de Pasco Railway. PISCO-ICA RAILWAY. The Pisco-to-Ica Railway is a 46-mile line, 4 feet 8£ inches gauge, with rail of 60 pounds average weight. The road extends from the port of Pisco in a southeasterly direction through the plain between the Pisco and lea Rivers, entering the lea Valley at Guadalupe and continuing to the city of lea (population 11.000), center of the finest grape country in the Republic. The port of Pisco is equipped with an excellent pier and ranks highest in importance of any port be- tween Callao and Mollendo. The Pisco-to-Ica Railway is the prop- erty of the Peruvian Government, is leased to the Peruvian Corpora- tion, and sublet by the latter to private parties at an annual rental of 30 per cent of gross receipts. These receiDts for 1915-16 totaled £17,614 ($85,725), of which amount £5,285 ($25,700) accrued to the Peruvian Corporation as rental. ILO-MOQUEGUA RAILWAY. The Ilo-to-Moquegua Railway, about 62 miles in length, links Ilo, the most southerly port in the Republic, with Moquegua, capital of the Province bearing that name. Wine, grapes, olives, and similar products are exported from the district adjacent to the line. The railway was constructed between 1870 and 1873, but following the Chilean War (1879-1883) was abandoned and was not reopened until 1907. Two or three years ago arrangements were virtually completed whereby the property would be leased by the Peruvian Corporation for a term of 30 years, but the railway's operations have not as yet been included in the corporation's income account. The company has exclusive railway privileges over an area of 15 miles on either side of its line, and is to construct at a cost of £10,000 ($48,650) a water-suppiy system for the town of Ilo. RAILWAYS NOT CONTROLLED BY PERUVIAN CORPORATION. Probably the most important of the various lines not under the control of the Peruvian Corporation is the Cerro de Pasco Railway, owned by the mining corporation of similar name. This railway runs on the Andean Plateau from Oroya, the junction with the Pe- ruvian Central, to Junin, La Fundacion, Cerro de Pasco, and Goyl- larisquisga. The total mileage is 135 ; gauge, 4 feet 8£ inches ; weight of rail 70 pounds to the yard. The equipment consists of 14 loco- motives, 270 freight cars, and a number of passenger cars of Ameri- can manufacture. The main line has an average grade of 1.5 per cent, with a maximum of 3.7 per cent, and cost upward of $2,000,000. SOUTH AMERICA PEBTJ. 333 The revenue from operation for the period January 1 to September 30, 1916, amounted to $280,348. The extension of this line toward the River Ucayali, making con- nection at Puerta Victoria or at some other port on this navigable affluent of the Amazon, is projected. On various occasions conces- sions have been granted for the construction of this road, but so far practically nothing has been done other than the making of surveys for possible routes. Its construction will probably be deferred for the present. Various plans have been proposed and various routes have been suggested to furnish the Cerro de Pasco mines an outlet to some port other than Callao. Thus far little actual progress has been made. The North Western Railway of Peru, gauge 3 feet, extends from Ancon, where it connects with the Central Railway of Peru, north- ward to Huacho, thence eastward to Sayan; total length, about 130 * miles. The railway was to have been extended from Ancon to Lima, but this plan met with opposition on the part of the Government, and it was also found that there was insufficient traffic to make the construction of the extension worth while. The North Western Rail- way of Peru is an English corporation registered October 31, 1908. Thus far its operation has resulted in a heavy loss, and interest has not been earned on the £1,014,400 ($4,936,575) 5 per cent debentures. Extensions have been projected to the Oyon coal fields and to the port of Suve. Gross earnings of the line for the year 1912-13 were £29.307 ($142,625) ; they have since increased somewhat. Triweekly passenger train service is maintained between Ancon (connecting with train from Lima) and Huacho, while regular train service is maintained between the latter point and Sayan. The office of the management is at Lima. MISCELLANEOUS RAILWAY LINES. None of the railway lines in the Republic not heretofore described have assumed any great importance. There is a 7-mile line known as the Tumbez & Puerto Pizarro Railway connecting Tumbez, the most northerly town of any importance in the Republic, with the port of Pizarro. This is a Government-owned line of 0.75-meter (2.46-foot) gauge and was opened for traffic in 1909. Only a small amount of business is handled at this port, which is not touched at by any of the regular steamship lines maintaining service along the coast. Farther south at the minor port of Bayover a 30-mile meter- gauge (3.28-foot) line known as the Bayover & Reventazon Railway terminates. This railway extends to some sulphur mines owned by the Sechura Mining & Industrial Syndicate and is not operated as a common carrier. Extending inland from the port of Eten, located a short distance to the north of Pacasmayo, there is a standard-gauge railway 41 miles in length. This railway extends to Chiclayo and Ferrinafe, with a branch from Chiclayo to Patapo. The capital stock is owned locally. Equipment consists of 8 locomotives, 13 passenger cars, and 55 freight cars, and the weight of rail is 54 pounds to the yard. Approximately 125 miles of extensions are projected ; these, however, are of 3-foot gauge. Some construction difficulties will have to be overcome and grades on the extensions will be fairly heavy. In 334 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. one part of the existing Chiclayo-to-Patapo line the grade reaches 6 per cent. This company publishes no statement of earnings and expenses. Recently it acquired the assets of the Pomalca Railway, formerly owned by the Sociedad Agricola Pomalca, connecting a large agricultural estate with Eten. The former management held and transferred certain valuable concessions for the construction of additional mileage. A number of short spurs or 'lines extending to plantations and mines have been built in various sections of the Republic. Some of these are classed as common carriers; none of them are of much importance. A most comprehensive construction program has been laid out for the future, which, if carried into effect, would cause the rapid development of the country's vast agricultural and min- eral resources and would open to the outside world the almost limit- less areas of virgin territory lying on the eastern slope of the Andes. PUBLIC UTILITIES. In the public-utility field Peru has shown excellent progress. Most of the important cities and towns have water and electric light and power systems, while telephones connect many sections of the Re- public. Tramway systems traverse the streets of Lima, Callao. and towns adjacent thereto, and also are established at Arequipa. Lima is also provided with a gas service, which, however, has not been well patronized during recent years. IMPORTANT COMPANIES IN LIMA-CALLAO DISTRICT. The most important public-utility company in Peru is the Em- presas Electricas Asociadas of Lima (Lima Light, Power & Tram- ways Co.), controlling the electricity and gas franchises in and adja- cent to Lima, as well as more than 86 miles of tramway. The £1,091,460 first-mortgage 5£ per cent bonds are listed on the London Stock Exchange and on the Lima Bourse. They form part of an original issue of £1,200,000 bonds, retirable by sinking fund. This sinking fund was suspended for two years commencing 1914 and has only recently been resumed. Earnings from electric light and power service for the year 1915 amounted to $751,023 as compared with $741,790 in 1914; net revenues totaled $505,972 ($523,562 in 1914). Tramway earnings amounted to $997,640 in 1915 ($997,712 in 1914) ; net revenues totaled $383,487 ($412,247 in 1914). Freight railways produced a revenue of $131,371 in 1915 and were run at an expense of $146,242. On December 31, 1915, 127 tramway cars were in service, many of familiar American makes. The surplus earnings of the company after fixed charges, depreciation, bad debts written off, etc., amounted in 1915 to $145,951. Total gross earnings from all sources were $1,880,085. The total amount of stock outstanding as of March 15, 1917, was Lpl,500,003, on which dividends have oeen paid in recent years as follows: 1906, 3 per cent; 1907, 6 per cent; 1908, 6 per cent; 1909 and 1910, 4^ per cent each; 1911, 5| per cent; 1912, 5£ per cent; 1913, 4J per cent; 1914, 1 per cent for first quarter; 1915, none ; 1916, 2 per cent for last portion of year. The Peruvian Telephone Co. (partly local and partly British capi- tal) furnishes the telephone service for Lima, Callao, and near-by places. SOUTH AMERICA — PEBU. 335 PUBLIC-UTILITY ENTERPRISES IN AREQUIPA. Arequipa, the metropolis of southern Peru, is located at a dis- tance of about 665 miles from Lima and is the center of a productive and somewhat important district. The city has a population slightly in excess of 40,000, and its altitude is approximately 7,550 feet. The water supply of the city, drawn from the near-by mountains, is furnished by the municipality and represents one of its principal forms of income. • Several mineral springs, two of which are widely known throughout South America, furnish the drinking water used by the upper classes generally. Electricity for light and power is furnished by the Sociedad Electrica de Arequipa (Ltd.), a local company that has been very successful. The company's power station is located at Charchani, on the Biver Chile, about 8 miles from the city, near the base of Mount Charchani (altitude of mountain approximately 19,500 feet). Upward of 27 miles of circuit are in use. The capitalization of the company amounts to $375,000 United States currency, and reserves total $97,140. Materials and current assets on hand as of December 31, 1916, indicated an excellent financial condition. Grpss earnings for the calendar year 1916 totaled $114,201, and expenses, including extraordinary repairs, amounted to $34,270. The net sur- plus was $79,931, from which a dividend of $45,000 (12 per cent) was paid to the shareholders. Dividends during recent years have averaged from 10 to 12 per cent per annum. • Shares, although not quoted, are worth more than. par, and are held by 55 stockholders. Senor M. Ugarteche, Arequipa, is the director-general. The traction service of the city is controlled by the Tranvia Elec- trico de Arequipa (Ltd.). The total authorized length of the sys- tem, including a series of belt lines and an extension to the town of Tingo, is 10 miles. Thus far the operations of the line have not proved as successful as was anticipated, and the road is operated at the present writing by W. K. Grace & Co. as agents for the Bond- holders' Syndicate, consisting of W. B. Grace & Co., the Italian Bank, the Bank of Peru and London, etc. There are outstanding at the present time £67,500 of an authorized issue of £75,000 8 per cent bonds, these being listed on the Lima Stock Exchange. The com- pany does not make public any statement of operating results. Eates of fare in the city are very low, the belt line charging %\ cents gold within the city limits. The rates to Tingo are 7£ cents first class and 5 cents second class. The manager of the company is an Amer- ican, and American equipment is used. The city is provided with an excellent telephone system, which serves the surrounding country and connects with through trunk lines to Mollendo and other sections of the Eepublic. The Mollendo extension is owned by the operating company, which is known as the Empresa de Telefonos Arequipa y Mollendo. The holder of the con- cession is Gustavo Llosa, of Arequipa, who, it is stated, owns the entire stock of the company. Subscribers number about 500. There is no gas company in the city, and it is hardly likely that one would pay. MINING ENTERPRISES. Peru, long the Eldorado of the Spanish Conquistadores, exported during the days of Spanish occupancy enormous quantities of gold, 336 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. silver, and copper. To-day, so far as gold is concerned, the country occupies an insignificant position among the nations of the world ; nor does it occupy a prominent position as a silver producer. These val- uable minerals are to-day mined mainly as by-products. Copper is king in Peru, and most of the copper is produced by three mines only, namely, the Cerro de Pasco Copper Co., the Backus & Johnston mine, and the Morococha mine. The Cerro de Pasco Co.'s mine is described in the Appendix (p. 521). The property produced during the period from its discovery to the year 1900 no less than 40,000,000 tons of silver and copper ore. The Morococha mine is under Cerro de Pasco control. During 1916 a total of approximately $1,200,000 of gold was mined in Peru, as compared with about $490,000 in 1911. About one-half of this gold was produced at Cerro de Pasco, the remainder being widely distributed. The principal gold mines are the New Chuquitambo (capital. Lp50,000; see Appendix) ; the Santo Domingo, controlled by the Inca Mining Co.; Aporama Goldfields (Ltd.), etc. Gold sta- tistics in this country are very difficult to obtain, it being almost im- possible to trace the amounts secured by Indians. Probably the most important silver mine in the Republic is that owned by the Anglo-French Ticapampa Silver Co., located near the port of Huarmey, with which it is connected by a short stretch of light railway. Dividends paid by this company have averaged from 20 to 25 per cent per annum. . The capitalization as of recent date was 2,500,000 francs. The entire directorate is French. The Morococha mine produces large amounts of the mineral. Its production during recent years has been as follows: 1911. 230,132 ounces; 1912, 431,226 ounces; 1913, 549,795 ounces; 1914, 608.322 ounces; 4915, 874,000 ounces; 1916 (estimated), 1,500,000 ounces. Now that silver is en- joying such a high price in the world's markets, there is likely to be a boom in the white metal in the Republic of Peru, and the country will probably again occupy a very high place as a producer. The copper production in Peru for three recent years,' according to a statement by American Consul General Handley, has been as fol- lows (long tons, 2,240 pounds) : 1913, 27,328 tons; 1914, 25,070 tons; 1915, 31,890 tons, fine copper. Copper exports from Callao totaled $14,198,799 in 1915. A small amount of copper was also exported from Salaverry. The copper reserve of the Cerro de Pasco prop- erties is estimated at 253,452,000 pounds. Coal is mined in large quantities at Goyllarisquisga, at or near which place the Cerro de Pasco Mining Co. holds 108 coal-mining claims. Coal reserves at these mines are estimated at 3,052,903 tons. Practically all of this coal is used at the Cerro de Pasco mines and smelters. Coal also exists at Oyon, Checras, Recuay, Hutunhuasi, near Oroya, and at other places. Exploitation of these mines has been much discussed, although little has thus far been done to develop them. It is not certain that all or any great part of this coal is of commercial value. Borax exists in large quantities near Arequipa. and it is expected that the Borax Consolidated (Ltd.), which owns the deposit, will be- ~in extensive development in the near future. Other minerals in eru are tungsten, lead, mercury, vanadium, bjsinuth salt, molybde-: W&&&"' V 3 IE < o F- co z: I O SOUTH AMERICA PEEXJ. 337 num. antimony, and zinc. None of these minerals are now mined in any considerable quantities. Gold is taxed £10 per kilo in dust or bar and £2 per kilo when con- tained in other minerals. Silver pays Is. per kilo at a fixed pai'ity of 23£d. per ounce ; 2£d. per kilo is payable for each advance of Id. per ounce in the price of the metal. At the present price of silver the tax received by the Government exceeds 3s. 6d. per kilo. The copper tax is 15s. per ton when the price does not exceed £65 per long ton. For all advances above that price the tax amounts to 10 per cent of the increased price. There is likewise a duty on all imported ma- terial and supplies. The following table gives the estimated value of Peruvian minerals produced in 1915 and 1916: Minerals. Gold Silver Copper Lead Mercury Zinc Vanadium. . . Molybdenum Tungsten SI, 114, 540 4,526,765 11,909,673 129,483 1,946 973 1,438,683 344,889 1916 (1,206,298 6,483,398 23,359,200 151,825 6,137 1,747 1,352.497 1,059,840 14,113 Minerals. Antimony Borates Salt..... Mineral waters . Coal Petroleum Total. 1915 143,161 19, 855 87,646 5,957 1,016,563 8,210,470 2S, 857, 587 1916 J134,038 67,741 88,804 12,371 772,260 7,418,804 42,129,073 THE PETROLEUM INDUSTRY. Extensive petroleum deposits exist in Peru and are being ex- ploited, largely in the Province of Paita and in other parts of *he northern coastal lands. The International Petroleum Co.. controlled by Standard Oil Co. interests, has taken the lead in the development of this field and has acquired some of the most important oil com- panies formerly operating independently. In addition to large amounts of this petroleum annually exported, a market exists locally, considerable amounts being annually used by the various railways of Peru, the Peruvian Steamship Co.'s vessels, the sugar mills, and various manufacturing enterprises. Oil has also been discovered near Puno on Lake Titicaca. Al- though this field has been widely discussed in the past, very little development has taken place. A ready market would be found for the product in the Republic of Bolivia. Petroleum exports of Peru for 1913 were valued at $1,616,006; for 1914, $1,202,697. The total production of petroleum in Peru in 1915 amounted to 285,000 tons, compared with 252,666 tons in 1914. There follows an interesting discussion of the petroleum resources of Peru by Frederick G. Clapp, S. G. : DISTRIBUTION OF PERUVIAN FIELDS. Ralph Arnold has grouped the Peruvian fields into two general districts, as follows : (A) That of the Andes, which contains the — 1. Titicaca field; and . (B) The Pacific coast "district, which includes the following— 2. Zorritos field. 63018°— 18 22 338 INVESTMENTS IN LATIN AMEBIOA AND BRITISH WEST INDIES. 3. Lobitos field. 4. Negritos field. In accordance with our own practice, we might more properly speak of the Zorritos, Lobitos, and Negritos fields as "pools," since they all lie in the Department of Piura, but this distinction is unimportant for practical pur- poses. Arnold quotes C. M. Hunter as giving (in a personal letter) the total area of oil territory in Peru as over 5,000 square miles, of which 100 square miles have oil possibilities and 200 square miles are proved. In 1915 there were 524 wells in the whole country, of which 90 had been sunk the previous year. Petroleum is also found in the districts of Pirin, Chimbote, Jauja, Huaiica- velica, and lea ; in fact, it is said to occur at frequent intervals from Tumbez all the way to Lake Titicaca. In 1915 the following petroleum companies were operating in the country : Bayovar Oil Development Co. (Ltd.), owning 558 pertenencias (claims) near Paita, but not having Started operations. Establecimiento Industrial de Petroleo de Zorritos, owning fields of 17 square miles at Zorritos, 27 wells producing. The output in 1913 was 3,500,000 gallons. It has a refinery at Zorritos. Lagunitas Oil Co. (Ltd.), owning 8 square miles, and situated 11 miles from Talara, under lease for 35 years from the London & Pacific Petroleum Co. The 1915 output exceeded 2,500 tons a month. Lobitos Oilfields (Ltd.), owning 11,000 acres between Lobitos and La Cruz; also' owning stores and three tank steamers. The production has been as follows : Tons. 1911 52, 172 1912 78, 272 1913 74, 314 London & Pacific Petroleum Co., owning extensive leases in the Province of Paita, partly subleased to the Lagunitas Oil Co. It also ewns a fleet of tank steamers and has a refinery at Talara. Titicaca Petroleum Co., operating in the Titicaca field. West Coast Fuel Co. (Ltd.), owning storage tanks, pipe lines, etc., at Paita and Callao. A. CENTRAL (ANDEAN) DISTRICT. Oil is found at several points in the Andes, as in the Huallanca region, in Cerro de Pasco, and in the Provinces of Jauja and Parinacochas. The principal known deposits are near Lake Titicaca. 1. Titicaca field. — This field is situated in the district of Puno, 300 miles (482 kilometers) from the Coast, 8 miles (12 kilometers) distant from Lake Titicaca, high in the Andes, and near the Bolivian frontier, extending from Cuzco to the boundary of Bolivia. The deposits are found in the Provinces of Canas, Lampa, Azangaro, and Huancane. Exploration was most extensive in the region of Pirin, in the district of Pusi, Province of Huancane, about 5 kilo- meters northwest of the town of Pusi. The work has been done by the Titicaca Petroleum Co., a United States corporation, which discovered oil in 1906. and which in 1912 had sunk 10 wells reported producing an average of 50 barrels per day, the oil being paraffin base. The Pirin and Corapata localities are only a short distance from Juliaca Station of the Southern Railway near the Bay of Eacallani on Lake Titicaca. At Corapata a company composed of Peruvian and Chilean capitalists has carried on exploration work. The Titicaca field now appears to be abandoned. B. PACIFIC (COASTAL) DISTEICT. The coastal belt extends southward through a desert waste of 2,000 miles (3,218 kilometers) from the Ecua-dorean frontier to Chile. The developed fields, however, extend only from the town of Tumbez, south of the Oulf of Guayaquil, for 180 miles (289 kilometers), to and beyond Paita, being bounded on the east by spurs of the Andes Mountains, and on the west believed to include the Islands of Lobos. The field is said to be about 30 miles (48 kilometers) wide, and occupies the Province of Tumbez and the northern part of the Province of Piura, but English experts believe it will prove to be 150 miles (241 kilo- meters) wide east and west. SOUTH AMEEICA PERU. 339 The fields are situated between the hills of Illescas, south of the port of Paita, in the Department of Piura, and the town of Tumbez, in the north of the Province of the same name bordering on Ecuador. The eastern boundary is considered to be the chain of foothills of La Brea or Amotape, constituting outliers of the Andes. The coastal fields have little vegetation. Rain seldom falls, but the tempera- ture is said to be ideal. All water used is condensed sea water. Wells range from 250 to over 3,000 feet (76 to 914 meters) in depth. The best geographic description of the Pacific district of Peru is given by Deustua, a writer in the Mining Journal, who says that there are two great regions : the eastern, comprising the La Brea chain of mauntains and other spurs of the western Cordillera of the Andes ; and the western, which is smooth, and lies along the coast, and includes a series of plateaus. The mountain region forms the eastern boundary of the coastal plains and of the oil-bearing formation of the Provinces of Tumbez and Paita. The plateau to the north of Paita has an elevation of from 50 to 150 meters (164 to 492 feet), but farther south it almost declines to sea level. 2. Zorritos field. — The Zorritos field is the oldest and the most northern in Peru. It is situated only about 24 miles (38 kilometers) south of Tumbez, south of the Gulf of Guayaquil. The producing territory extends along the coast for about 4 miles (6 kilometers), most of the wells being drilled at the water's edge and some in the edge of the ocean. The Zorritos field is owned by Faustino G. Piaggio & Co., of Callao, whose property in 1910 covered 2,160,000 square meters, not all situated in this field, however. The greatest depth known to have been reached in the Zorritos field is 3,020 feet (920.5 meters) in Peroles ravine; but most wells are between 600 and 2,000 feet (182 and 609 meters) deep. The productions run in some cases as high as 500 to 600 barrels per day ; one-third of all the wells drilled have been failures. 3. Lobitos field. — Next south is the Lobitos field in the Department of Piura, about 60 miles (96 kilometers) north of Paita. The proved area of this field is about 25 square miles (64 square kilometers). It is owned by the Lobitos Oilfields (Ltd.). This is the district of second largest production in Peru. The cost of wells 3,000 feet (914 meters) deep averages about $10 per foot, as against $1.50 or $2 per foot for wells under 1,500 feet. The deepest well in the field was sunk to a depth of 3,435 feet without success, requiring 18 months to drill. All the wells are over 2,000 feet deep. The shallower ones in this field have been short-lived, but the deeper sand favors greater expectations. In 1915 a new pool was reported opened at Punta Restin, 12 miles north of Lobitos. 4. Negritos or Talara field. — The southernmost and richest of the developed coastal areas is the Negritos field, situated 40 miles (64 kilometers) north of Paita, in the Hacienda La Mina Brea and Parinas. The area 'of this field is about 650 square miles (1,683 square kilometers). Negritos is the center of drilling operations, and Talara, 16 miles distant, where the refinery and wharves are situated, has an excellent harbor, which is connected with the field by a 6-inch pipe line and 16 miles of narrow-gauge railway. At a point 11 miles east of this field is an asphalt seepage called " La Brea." In the Negritos field the first company to operate was the London & Pacific Petroleum Co., the holdings of which covered 650 square miles. The average deptlj of the wells is 2,500 or 3,000 feet, and the most important oil deposits are below 1,500 feet. SURFACE INDICATIONS. The surface indications in Peru consist of: 1. Asphaltic and petroleum-saturated limestones, clays, etc. 2. Association of bitumens with ore deposits. 3. Bituminous dikes. 4. Oil seepages. 5. Submarine petroleum springs. STATISTICS OF PRODUCTION. The following table shows the production of crude petroleum In Peruvian fields, in barrels. The figures are in part from " Treatise on Petroleum," by Sir Boverton Redwood (1913), 3, 109; in part from Thompson's "Petroleum 340 INVESTMENTS IN LATIN AMEUCA AND BEITISH WEST INDIES. Mining," 32, and in part compiled by Miss AnDa B. Koons of the United States Geological Survey : Years. Zorritos. Lobitos. Negritos. Titicaca. Lagunitos. Tota . 1896 Barrels. 47,536 68,452 68,571 89, 166 102,976 74,647 59,273 49,047 49, 547 37,720 42,419 65,476 71,429 70,750 107,000 64,286 78,095 83,343 88,136 72, 736 Barrels. Barrels Barrels. Barrels. Barrels. 47,836 70,831 165,863 235,104 320,012 314,135 265,023 318,471 345,834 1897 2,379 97,292 145,938 217,036 239,488 205,810 269, 424 295,617 335,160 330, 510 396, 750 543, 750 740,070 773.025 882,698 1,071,000 1,036,490 1,032,210 1,355,925 1898 1899 1900 1901 1902 1903 : 1904 1905 « 75, 000 162,000 279,000 319,898 429, 195 400,080 391.290 587i 048 557,355 504,743 664,972 447,880 536,294 756,226 1,011,180 1906 1,365 15,000 1907 1908 1909 1,316,118 1,330,105 1,368,274 1,751,143 2.133,261 1,917,802 2,487,251 1910 1911 1912 -346,073 282,713 392,618 1914 1915 o Estimated. GUANO GATHERING. Guano, once the most important export from Peru, is no longer a source of any considerable revenue to the Republic. The Peruvian Corporation, in accordance with agreements between the Peruvian Government and the bondholders made at the time of the formation of the corporation, was allotted 2,000,000 tons of this guano to be shipped over a period of years. Up to 1915 the Peruvian Corpora- tion, according to official audits, had shipped 1,237,128 tons of this guano. Eecent decrees of the Government confined the operations of the corporation to certain islands and restricted areas, against which the corporation and the British, French, and Dutch Govern- ments have officially protested. The Peruvian Corporation, owing to existing conditions, made no shipments during 1916. In addition to the Peruvian Corporation, an independent guano- gathering concern exists; this is under German control. AGRICULTURE. Sugar is the leading agricultural product of Peru and as an article of export is bringing considerable wealth to the nation. Despite abnormal freight charges and lack of ship tonnage, Peruvian sugar is finding its way to Europe and other parts of the world. Chile buys large quanti- ties of it, while considerable amounts are used for home consumption. It is the writer's belief that the sugar industry will be the backbone of the future development of the country. Already large sums of British and German capital have been invested in the sugar planta- tions, and as soon as the war is over additional sums will follow. Production costs are low. The sugar plantations are located mestly in the irrigated country west of the mountains, although a number of plantations exist on the eastern slope. The sugar acreage exceeds 100,000. Salaverry is the leading sugar port at present, and Trujillo is the center of the industry. Splendid sugar country is found near the port of Chimbote, but better irrigation facilities are needed, SOUTH AMEEICA PERU. 341 The Peruvian Sugar Co. (Ltd.) has important plantations near tliat port. Statistics follow indicating the area of sugar lands under cultiva- tion and the production of sugar and " chancaca," alcohol, and rum : Years. Area under cultiva- tion. Produc- tion of sugar and chancaca. Produc- tion of alcohol and rum. 1911 Acres. 86,879 91, 747 97,745 100.641 10K770 100,650 Metric tons. 178,533 192,754 183,954 228,055 262,840 276,000 Gallons. 2,050,965 1912 2,405,406 2,346,772 1913 1914 2,869,165 1915 2,673,666 1916 Employees in the sugar plantations numbered 16,977 in 1911, 19,945 in 1912, 20,942 in 1913, 21,881 in 1914, and 24,433 in 1915. While no 1916 statistics are as yet available, it is said that more than 25,000 men and women are at present employed in the industry. The average daily wage paid to employees was (year 1913) 1.25 soles ($0.60 United States currency). It is stated that the produc- tion cost of Peruvian sugar averages less than $25 per metric ton in plantations where up-to-date equipment is used and about $30 per metric ton under old-fashioned methods. The production of cane per acre is almost double that of Cuba, and labor costs infinitely less. Warehousing and storage costs are almost nil, owing to the fact that practically no rain falls in the coastal lands. When additional steamship tonnage is obtainable, the industry will advance with rapid strides. The field is worthy of investigation. Cotton raising is another important industry in Peru, particularly in the northern coastal valleys adjacent to the port of Paita. A total of 46,571,797 pounds of cotton was exported in 1915, as compared with 53,491,774 pounds in 1914. The value of the 1915 exports was $6,165,252. In addition there was exported, in 1915, 13,222 tons of cotton seed and 7,299 tons of cottonseed cake, the value of these com- modities being $898,269. Chile and Great Britain took most of the cotton seed and cottonseed cake. High freight rates and the low price until recently prevailing for cotton has greatly injured this industry in Peru. Home consumption is quite large, however, there being several cotton mills of importance in the Republic, one of which, the Peruvian Cotton Mill Co. (Ltd.), is capitalized at ap- proximately $500,000. This company paid 10 per cent in dividends during 1916. Approximately $2,500,000 has been invested in the milling industry. It has been pointed out to the writer that a cotton- seed-oil factory would do a good business in Peru. A total of about 6,500,000 pounds of raw cotton was used by the mills of Peru during 1915. A large portion of the cotton produced in Peru is similar to that grown in the irrigated regions of Egypt. It is mostly of a long fiber used largely to mix with wool used in underwear, stockings, etc., the resulting fabrics being very durable and showing little tend- ency to shrink. The average length of the Peruvian cotton fiber, as compared with other cotton fibers, is as follows: Sea Island (a small amount of this is raised in Peru), 1.61 inches; Egyptian, 1.41 inches; Peruvian, 1.30 inches ; Brazilian, 1.17 inches ; American upland, 1.02 342 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. inches; and Indian, 0.89 inch. Fair amounts of British capital, as well as considerable sums of German money, have been invested in the cotton industry. Tobacco is raised in fair quantities, largely in the northern Prov- inces of Tumbez and Huancabamba. Large amounts are also im- ported, mostly from Ecuador. The National Tax Collecting Co. has a monopoly on this enterprise and manufactures or imports all the cigars, cigarettes, and similar products sold in the Republic. A total of 370,000,000 cigarettes were manufactured during 1915. Receipts from the tobacco monopoly for that year exceeded $2,280,000. Rubber is the one product of commercial importance of the eastern montana region of Peru, all of this being gathered near the numerous affluents of the upper Amazon River and shipped in small steamers or flatboats to Iquitos, where it is transshipped to ocean steamers destined for ports of Europe and the United States. The exports of this commodity from 1908 to 1912 averaged from 4,500,000 to 5,500,000 pounds, and the trade of the rubber district during this period of prosperity averaged between $20,000,000 and $30,000,000 per annum. Following the rubber crash of 1913-14 the importance of this indus- try declined. Exports for 1913 were $3,970,159 ; for 1914, $2,169,445 ; for 1915, $2,937,891 ; for 1916, $3,391,459. ' The recent advance in the price of rubber will doubtless help to revive the industry, but it is not likely that it will regain its former importance for some time to come. Hides, leather, and wool are also important products of the coun- try. Arequipa is the center of this industry. LOCAL ENTERPRISES IN THE REPUBLIC. As a general illustration of development along local lines, there follows a brief description of the activities of the bourse at Lima. As of March 15, 1917, there were listed on the bourse at Lima, Peru, 59 securities of a par value of Lpl2,933,201. These included bonds and cedulas of a par value of Lp5,490,285 ; stocks of banks, national tax-collecting companies, insurance companies, and agricultural socie- ties of a par value of Lp5,275,000; and stocks of mining, manufac- turing, steamship, public utility, and other companies of a par value of Lp2,167,916. Of the 20 bonds and cedulas listed (not including internal obligations of the Republic of Peru), 6 bear interest at from 5£ to 7 per cent, 13 at 8 per cent, and 1 at 9 per cent. All of these bonds were obligations of local enterprises. There are listed on the bourse stocks of 36 enterprises, all Peruvian, of which no fewer than 29 usually receive dividends. The highest dividend paid during 1916 by any of the local institutions whose securities are listed was 40 per cent, this being distributed bv the Compania Internacional de Seguros del Peru. The shares of this company are quoted at 570 per cent of par bid ; none offered. Shares of the Compania de Seguros Rimac, on which 30 per cent was paid last year, are quoted at 550 per cent bid. The most widely distributed shares are those of the Compania Recaudadora de Impuestos. the National Tax Collecting Co., capitalized at Lpl,500,000, par value LplO, of which Lp9 is paid in. These shares are quoted at approxi- mately Lp8.80@Lp9. FP While there are a number of brokers executing orders on this bourse, it is hardly likely that many of them would be equipped to SOUTH AMEEICA — PEEU. 343 handle foreign orders. Any of the Peruvian banks would handle transactions and ship securities. Commissions are nominal. The following table shows the dividends paid by the principal Peruvian companies during 1915 and 1916 : Companies. Capitaliza- tion. Dividends paid. Banco del Peru y Londres Banco Italiano Banco .International del Peru! Banco Popular del Peru CreViito Hipotecario del Jeru. . TAX-COLLECTING COMPANIES. Compania Administradora del Guano Compania Saline ra del Peru Compania Administradora de los Almacenes Fiscales . Compania Becaudadora de Impuestos INSURANCE COMPANIES. Compania International de Seguros del Peru. Compafiia de Seguros Rimac Compania de Seguros Italia Compania de Seguros La National Compania de Seguros La Popular Companias TTnidas. de Seguros AGRICULTURAL SOCIETIES. Sociedad Agrfcola San Nicolas. . . Sotiedad Ganadera de Junin Sociedad Agrfcola Paramonga. . . Ingenio Azucarero Corpacancha. Sociedad Industrial La Est re] la., Ingenio de Huaura MANUFACTURING COMPANIES. Peruvian Cotton Mill Co Fabrica de Sombreros "Fenix" TRANSPORTATION COMPANIES. Empresa del Muelle de Tambb de Mora Peruvian Steamship Co. (Cia. Peruana de Vapores).. PUBLIC-UTILITY COMPANIES. Empresa del Agua de Barranco Empresa del Agua de Miraflores Empresa del Agua del Paita y Colan . Empresa de Agua Potable de Piura... E mpresas Electricas Asociadas Sotiedad Eleetrica de Arequipa Peruvian Telephone Co. (Ltd.) Lima" Railways (Ltd.) MINING COMPANIES. Cerrode Pasco Mining Co New Chuquitambo Gold Mines (Ltd.) . MISCELLANEOUS COMPANIES. Peruvian Corporation (preference). Municipal Theater Co. (Lima) Compafiia Urbana Cocharcas Peruvian pounds. Lp500,000 200,000 100,000 200,000 50,000 30,000 100,000 100,000 1,350,000 200,000 250,000 200,000 250,000 200,000 500,000 c 160, 000 110,000 400,000 30,000 110,000 35,000 100,000 9,963 25,000 » 300, 000 20,000 8,000 6,000 10,000 cl, 500, 000 375,000 Per cent. 3 7 4 5 12 10 12 10 8.! "400,000 CO 50,000 7,500,000 c 7,650 20,000 Percent. («) 10 4J 7 14 40 30 10 16 13 15 10 8 («) 11 (•) 16 6 6 6 8 3 M (•) 62 10 "ii' 33 1 "iened in Caracas. The former has established a branch in Maracaibo. Both banks will no doubt extend their activities to other parts of the country in the future. Under Venezuelan law, Consul Henry says, any foreign bank prop- erly chartered under the laws of its own country can come to Vene- zuela and do business. Before doing so, however, a certificate as to its charter must be produced and a copy of the bank act of the char- tering country. These must be duly registered in accordance with local law. To become banks of issue banks must submit to a greater degree of Government control and supervision. None of the foreign banks are at present authorized to issue notes. The particular opera- tions of banks are governed by a special statute and business opera- tions in general by the code of commerce. The foreign banks do a general banking business, consisting largely of commercial loans, usually made by overdrafts, exchange transac- tions, etc. Most of them do not, as a rule, make advances on products of the country, though this is done by the Venezuelan banks, and there is undoubtedly a considerable volume of this kind of business 374 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. available. Interest rates, all things considered, are not high for a country where capital is so much needed, the usual rates being from 8 to 10 per cent per annum for commercial loans. Bank deposits are small and banks have in the past found themselves continually in the need of importing gold, inability to do which recently has completely upset the exchange market. As the handling of drafts forms such an important part of Vene- zuelan banking business, the following points may be of interest in regard to them. Drafts of all kinds, must bear stamps according to their value, as shown below : Value of draft. Stamp required. Value of draft. Stamp required Bolivar. 0.05 .10 .20 .30 Bolivar. 0.40 .60 1.00 201 to 300 bolivares For sums larger than those shown above the tax is 1 bolivar ($0,193) for each 1,000 bolivares or fraction. Consul Henry says that in case of drafts from the exterior sent for collection, according to local custom the drawee does not pay collec- tion charges or stamps. The purchaser of a draft in Venezuela pays for the stamps, though formerly certain banks used to assume this charge. Banks do not accept consignments on account of customs laws, and for the same reason " to order " shipments are prohibited. As has been frequently pointed out, sending drafts to banks with documents attached affords the foreign seller no protection, as the consignee named in the invoice can for a small fee obtain copies of the necessary documents from the customhouse. Commercial information can usually be obtained from the banks, but there are no agencies devoting themselves exclusively to this business and care should be exercised by foreign houses in doing business with small and little-known merchants. RAILWAY DEVELOPMENT. Eailway development in Venezuela has been slow in the extreme. There are no important lines in the Eepublic, the maximum lengtn attained by any line being 111 miles. To give a description of the various railways in operation the report of United States Consul Homer Brett on " Railway Construction and Revenues in Venezuela " is quoted in its entirety, this most excellent report covering the sub- ject thoroughly : x With 530 miles of steam lines in operation, Venezuela has 7 feet of railway for each square mile of territory, and 11.8 inches per head of population. The average freight rate is 30.5 cents per ton-mile; the average passenger rate 6.57 cents per mile for first class and 4.6 cents for second class. All lines are narrow gauge, the various widths being 3 feet 6 inches, 1 meter (39.37 inches), 3 feet, and „ 'S-°? s ^ 1 ? Te ^ v ? re P° rt extends as far as the heading " Securities and Quotations of British-Controlled Lines, on page 382. SOUTH AMEBICA — VENEZUELA. 375 2 feet. As a rule there is no interchange of cars between the vari- ous roads. Freights are based upon weights without regard to the class or value of the merchandise, and no reductions are made for carload or other quantity shipments. Upon the more important lines the equipment is of European origin and type. With two ex- ceptions all the roads are short lines from a port to a city or a populated district on the highlands not far from tidewater. Practically all the existing railways were built between 1881 and 1893 under Government subsidies and guaranties of interest upon the capital invested. This policy was greatly modified in 1892 and 1897, and as a result not a single mile of railroad was constructed. In 1912 the present law was passed, and in 1914 some extensions of existing lines were begun. In 1895 the Government raised a loan of 50,000,000 bolivares ($9,650,000), with which three of the least profitable roads were taken over, the accrued debt upon the guaranties paid, and tlie guaranteeing clauses canceled in all contracts except that of the Puerto Cabello- Valencia Railway. In 1916 this company accepted £190,000 sterling ($924,635) in payment of all accrued indebtedness and for the cancellation of the interest guaranty for the future. On several of the main roads traffic is lighter now than 25 years ago, and notwithstanding the fact that rail transportation is as costly as that by pack mule, scarcely any of the railway enterprises have earned a fair return upon the capital invested, though certainly transportation has been quickened and rates have been steadied if not cheapened. It is probable that in several cases capital invest- ments have been smaller and earnings greater than the statistics indicate. The reasons for the conditions shown lie in the sparseness of the population, and its distribution in a long narrow strip of territory skirting the seaboard, which leads to the building of unconnected lines with short hauls; in the moderate producing and consuming power of the people; and in the general refusal of the lines to grant low rates for commodities of small value. In 1915 the total cargo movement over all railways amounted to 280,621 tons, which, on a basis of 300 working days .per year, gives a daily movement of only If tons per mile of line. BOLIVAR RAILWAY. The Bolivar Eailway (British capital) was the first road under- taken in Venezuela. Its object was to provide an outlet for ore from the copper mines in the State of Yaracuy. Construction was begun successively in 1835, in 1862, and for the third time in 1872. The main line was completed in 1877. It runs from the port of Tucacas (northwest of Puerto Cabello) to Aroa and Barquisimeto, and has a branch (opened to public service in July, 1916) from Palma Sola to San Felipe, the capital of the State of Yaracuy. The contract length is 218.5 kilometers (136 miles). The gauge is 2 feet, and the rail runs 48 pounds to the yard. The capital stock amounts to $6,822,550 United States currency. The maximum grade is 5.27 per cent, the minimum radius of curves 46.83 meters, ties are of wood and of steel, and there are 518 bridges having a combined length of 2,119 meters. The road has 13 locomotives with a total weight of 294 tons, 9 passenger coaches, 69 flat cars, 61 box cars, and 125 stock cars. The 376 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. passenger tariff is 5.8 cents per mile for first class and 3.8 cents for second. The freight rate equals 29 cents per ton-mile. From 1895 to 1902 the road's gross income decreased steadily until the latter year it was only $91,711, after which it rose to $506,590 in 1913. 1 This road has made efforts to encourage agriculture along its line. The general manager is Mr. C. A. Hutchings ; address, the Bolivar Eailway, Aroa, via Tucacas, Venezuela. LA GUATRA-CABACAS EAILWAY. The La Guaira-Caracas Railway (British capital) was opened to service in 1883. It is 22 miles long, running from the port of La Guaira to the city of Caracas and climbing from sea level to a height of more than 3,000 feet. Although in appearance a dangerous line, it is so well constructed and so carefully policed that there has never been an accident involving loss of life. The gauge is 3 feet, the rail weighs 65 pounds to the yard, and ties are of native hardwood. The maximum grade is 3| per cent; the minimum radius of curves 43 meters. There are 15 bridges with a combined length of 281.55 meters and 8 tunnels with a total length of 379.5 meters. The rolling stock consists of 15 locomotives, with a total weight of 520 tons, 28 passenger coaches, 20 flat cars, 63 box cars, and 34 stock cars. The passenger tariff equals 10.94 cents per mile for first class and 6.68 cents for second. The freight rate is 26.38 cents per ton- mile for import (up-grade) freight and two-thirds of this amount for export or down-grade, the former greatly exceeding the latter in tonnage. The capital investment is stated as $3,508,740, and the capital stock of the company is $1,705,637. In 1917 gross revenues totaled $423,882 and operating expenses $201,517. The total income, includ- ing $6,857 brought forward from 1916, was $254,644. The dividend for the year was 6 per cent, free of tax, and the amount carried for- ward to 1918 was $15,651. The competition of pack animals, carts, and automobiles with the railway is keen, and will probably become keener unless the company reduces rates materially. Although the tracks of the La Guaira Harbor Corporation are of the same gauge as the railway, the cars of the latter never go to ship side, and much cargo is unnecessarily handled twice. The gauge differs from that of the other railways centering in Caracas. This is the best piece of railway property in the country ; with only one- twentieth of the total mileage, it transports nearly one-fourth of the freight handled by all lines. It is a steady dividend payer, and a generous portion of the earnings has been put back into the prop- erty. The general manager is Mr. James Flrnd ; address, La Guaira- Caracas Eailway, Caracas, Venezuela. GREAT RAILWAY OF VENEZUELA. The Great Railway of Venezuela (El Gran Ferrocarril de Vene- zuela, German capital) is the longest and most costly railway that has been constructed in Venezuela. It was opened to traffic in 1894, and cost $15,135,492, or an average of $85,226 for each of its 179 kilometers. This is a length of 111 miles. The road runs from Caracas westward to Valencia, the second city of the Republic, and its construction is much better than is justified either by the necessi- 1 For the year ended June 30, 1918, gross receipts totaled $660,112, as compared with $595,533 In 1916-17. South america — Venezuela. 377 ties or the possible traffic. It was built under a Government guar- anty of interest upon the capital invested, which was later can- celed in consideration of a cash payment. The gauge is 3£ feet; the rail weighs 47 pounds to the yard; the maximum grade is 2.2 per cent ; and the minimum radius of curves is 75 meters. There are 219 bridges and viaducts, having a combined length of 4,656.4 meters, and 86 tunnels, totaling 6,249 meters. The ties are of steel and of concrete, and the rolling stock consists of 18 locomotives, with a com- bined weight of 720 tons, 30 passenger coaches, 68 flat cars, 60 box cars, and 19 stock cars. The passenger tariff equals 6£ cents per mile for second class and 7.78 cents for first class, and the freight rate is equivalent to 15.65 cents per ton-mile. The freight traffic is small, and nearly half the revenue is from passengers carried. The best year was 1913, when gross receipts were $552,025 and a return of 1.6 per cent upon capital invested was earned. The management has attempted some development work in tree planting, the introduction of new crops, and the improvement of stock, but the grasshopper plague has affected the results. The company holds concessions for the construction of two branch lines southward into the llanos. PUERTO CABELLO-VALENCIA RAILWAY. The Puerto Cabello- Valencia Railway (British capital) is 33^ miles long, and runs from the port of Puerto Cabello to the -city of Valencia. It climbs over a pass 1,952 feet above sea level, and has at one point a rack-rail section 2.4 miles long with a maximum grade of 8 per cent, the steepest gradient on the smooth-rail sections being 3^ per cent. The gauge is 3| feet; the minimum radius of curves 91£ meters; there are 33 bridges with a combined length of 915.5 meters and one tunnel 76.25 meters long. The rail on the rack section runs 70 pounds and on the others 55 pounds to the yard. Rolling stock consists of 10 locomotives with a total weight of 398 tons, 13 passenger coaches, 26 flat cars, 43 box cars, and 28 stock cars. The passenger tariff equals 7^ cents per mile first class, and 6 cents per mile second class. The freight rates are equivalent to 20 cents per ton-mile, though the road in the effort to increase the amount of down-grade or export tonnage has recently made reductions upon some articles. The capital investment is stated as $3,898,600. In 1917 gross receipts were $243,364 and operating expenses $152,059. The surplus, including $21,636 brought forward, was $71,411. A dividend of 1J per cent (less tax) was paid, $24,931 was placed to renewal and reserve accounts, and $25,496 was carried forward to 1918. The road was built under a Government guaranty of 7 per cent upon the capital invested. This rate was never earned, and there were years of dispute as to the amounts actually invested and actually earned. Some pay- ments on this account were made ; the guaranty was reduced to 5 per cent, and in 1916 it was definitely canceled -in consideration of a cash payment of £190,000. The general manager is Mr. W. A. Littell ; address, Puerto Cabello- Valencia Railway, Valencia, Venezuela. CENTRAL RAILWAY OF VENEZUELA. The Central Railway of Venezuela (British capital) has 73.5 kilometers (46 miles) of completed line and 23.5 kilometers yet to be constructed to complete its contract. It runs from Caracas in a general southeasterly direction toward Ocumare on the Tuy River, 378 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. the town of Yare being the present terminus. The gauge is 3^ feet, the same as the Gran Ferrocarril, but wider than that of the La Guaira-Caracas railway. These are the roads centering in Caracas. The station is across the city from the others, and all transfer cargo has to be carted 2 miles. The capital stock of the company is 5,050,000 bolivares and the capital investment is 20,015,000 bolivares. The country traversed is classified as level 10 kilometers, broken 5 kilometers, rough 11, and mountainous 34. The average cost per kilometer is put at $67,722. The line began operations in 1887 and the gross receipts that year were 86,501 bolivares ; they were 295,487 bolivares in 1891, but only 73,114 bolivares in 1902. Since then they have increased steadily, and were 765,929 bolivares in 1915. The maximum grade is 4 per cent, the minimum radius of curves 50 meters. There are 75 bridges and viaducts with a combined length of 724 meters, and 14 tunnels. Ties are of wood and of steel, and on some stretches the rails have been placed upon limestone blocks, but this proved unsuccessful and has been given up. The company operates an electric service over its lines as far as,Petare. The road has 8 locomotives weighing 277 tons, 13 passenger cars, 23 flat cars, 14 box cars, and 4 stock cars. The passenger tariff is equal to 3 cents per mile, and the freight rate to 27 cents per ton- mile. Since 1906 the business of this road has increased rapidly. The general manager is Mr. Albert Cherry; address, Central Rail- way of Venezuela, Caracas. GREAT RAILWAY OF TACHIRA. The Great Railway of Tachira (El Gran Ferrocarril del Tachira, Venezuelan capital) is 120 kilometers (74.5 miles) long and runs from Encontrados on the Catatumbo, a river emptying into Lake Maracaibo, southward to San Felix. It is the principal outlet for the State of Tachira, its capital, San Cristobal, and the Colombian Department of Santander. The gauge is 1 meter (3.28 feet), the rail runs 40 pounds to the yard, the maximum grade is 2 per cent, the minimum curve radius 75 meters, and there are 6 bridges with a total length of 332 meters. The country traversed for a distance of 110 kilometers is level, and for 10 kilometers it is broken. The average construction cost is given as only 61,135 bolivares per kilo- meter. Rolling stock consists of 7 locomotives with a total weight of 210 tons, 6 passenger coaches, 34 flat cars, 32 box cars, and 4 stock cars. The passenger tariff is equivalent to 6.8 cents per mile for first class and 3.4 cents per mile for second class. The northbound, or export, freight rate is 21 cents per ton-mile and the southbound, or import, rate 35 cents. The amount of cargo transported annu- ally varies greatly, depending almost entirely upon the price of coffee and the size of the crop. In 1902, 11,113 tons, and in 1903, 27,582 tons were transported. The latter figure is the highest ever reached. The capital stock of the company is 7,000,000 bolivares, or $1,351,- 000, fully paid in. American interests own some of the stock and, contrary to the usual rule in Venezuela, nearly all the material is of American origin. Owing to its moderate capitalization and con- struction cost this railway shows better returns than any other in SOUTH AMERICA VENEZUELA. 379 Venezuela. The gross earnings for 1913 were 10.88 per cent, com- pared with 8 per cent for the next best road. Its principal difficul- ties are with inundations by the Catatumbo River, which threaten the destruction of the port of Encontrados, and the greatest obstacle to the growth of its traffic is the fact that merchandise destined for its territory must undergo so many handlings en route that the cost is greatly increased and the consumption correspondingly dimin- ished. The local address of this railway is Sefior Pedro N. Olivares, Gerente del Gran Ferrocarril del Tachira, Maracaibo, Venezuela. LA CEIBA RAILWAY. The La Ceiba Railway (El Ferrocarril de La Ceiba, Venezuelan capital) is 50.6 miles long and runs from the port of La Ceiba on Lake Maracaibo toward the city of Trujillo in the State of the same name. The gauge is 3 feet, the rail weight 40 pounds to the yard, the maximum grade 3 per cent, the" minimum curve radius 80 meters, and there are 37 bridges, with a combined length of 1,356 meters. Rolling stock consists of 6 locomotives, with total weight of 135 tons, 7 passenger coaches, 7 flat cars, 34 box cars, and 2 stock cars. The passenger tariff equals 5.3 cents per mile first class and 3.8 cents second class, and the freight rate is 31 cents per ton-mile. Capital investment and capital stock are both stated as 8,000,000 bolivares ($1,544,000). Gross receipts were 1,285,872 bolivares in 1896, 582,160 bolivares in 1905, and 975,445 bolivares in 1915. When this line was only half its present length and the capital only 2,000,000 bolivares it earned 17£ per cent, whereas now its returns are only about 5£ per cent. In 1912 there were 21,051 tons of cargo trans- ported, and in 1915 only 14,874 tons. Like most Venezuelan railways, this one suffers severely from the competition of the pack mule. The address of the company is Sefior R. Belloso Rincon, Gerente del Gran Ferrocarril de La Ceiba, Maracaibo, Venezuela. SANTA BARBARA-EL VIGIA RAILWAY. The Santa Barbara-El Vigia Railway (Venezuelan capital), with 37 kilometers (23 miles) in operation, and a contract length of 60 kilometers, runs from Santa Barbara, a port on the Escalante River, which empties into Lake Maracaibo, toward the city of Merida in the State of the same name. The gauge is 1 meter (3.28 feet), the rail weight 40 pounds to the yard, the steepest gradient 2 per cent, the minimum curve radius 100 meters, and there are 15 bridges with a combined length of 138 meters. The rolling stock consists of 5 loco- motives with a total weight of 124 tons, 6 passenger coaches, 12 flat cars, 14 box cars, and 1 stock car. The passenger rate is 6 cents per mile for first class and 4 cents for second class, and the freight rate equals 39 cents per ton-mile for imports and 34 cents per ton- mile for export cargo. The construction cost is stated as 3,021,880 bolivares ($583,223). It was built by a French company, under guaranty, and was taken over by the Venezuelan Government in 1895. Gross receipts have in- creased steadily from 154,020 bolivares in 1909 to 465,869 bolivares in 1915." In 1892 the road was partially destroyed by an inundation of the Chama River; from that year locomotives operated only to 380 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. kilometer 37 and cars were drawn by mule power to kilometer 47, where pack transport began, but in June and July, 1915, new floods of the Chama destroyed still more of the line. The Government has appropriated its rental to reconstruction, and the work is pro- gressing. Of the three lines owned by the Government this is the only one that shows an operating profit. It is not managed directly, but is leased to Sefior J. A. Redondo, Santa Barbara, Venezuela, GUANTA-NARICUAL RAILWAY. The Guanta-Naricual Railway (Venezuelan capital) is 25 miles long and runs from the port of Guanta (situated east of La Guaira) to the city of Barcelona and the coal mines at Naricual. It was built under a guaranty of interest and was bought by the Government in 1895. The gauge is 3 feet 6 inches, the rail weighs 40 pounds to the yard, the maximum grade is 2£ per cent, and the minimum curve radius 125 meters. There are 6 bridges with a combined length of 265 meters. The rolling stock consists of 3 locomotives weighing altogether 60 tons, 8 passenger coaches, 6 flat cars, and 6 box cars. The passenger tariff is 6f cents per mile for first class and 5 cents per mile second class, and the freight rate is equal to 34 cents per ton-mile. The capital investment is given as 5,199,745 bolivares. The gross income in 1892 was 109,445 bolivares, and with occasional and slight recoveries fell continually until, in 1913, it was only 58,625 bolivares. In 1915 receipts were 103,023 bolivares, or 8,124 bolivares less than expenditures. The road is operated by the Government through an administrator who also manages the coal mines at Naricual and the pier at Guanta. In October, 1915, the Never! River was declared open to coastwise navigation. This decision caused a great decrease in the amount of cargo carried by the railway between the city of Barcelona and the port of Guanta, so that now the line is almost entirely dependent upon the freight paid by coal from the mines at Naricual. The ad- dress of the manager is Sefior Juan G. Aldrey, Administrador del Ferrocarril de Guanta a Naricual, Barcelona, Venezuela, CARENERO RAILWAY. The Carenero Railway (French capital) is 34 miles long and runs from the coasting port of Carenero along the coast, serving the cacao-producing section known as the " Barlovento." The gauge is 3 feet, and the rail runs 40 pounds to the yard. Rolling stock consists of 5 locomotives weighing altogether 90 tons, 5 passenger coaches, 6 flat cars, 22 box cars, and 9 stock cars. The passenger tariff equals 6.28 cents per mile, and the freight rate 46.6 cents per ton-mile. Despite these rates the line has shown a favorable balance in only 4 years out of the last 27. The heaviest traffic was in 1910, when 9,937 tons of freight were transported. In 1915 tonnage was 7,506, and the gross income was 312,614 bolivares, or 21,749 bolivares less than expenses. The road's management also runs a steamship line between Carenero and La Guaira. The owner is Sr. Victor Crassus, of Caracas, and the manager is Sr. R. E. Crassus, of Rio Chico, Venezuela. SOUTH AMEEICA VENEZUELA. 381 \ CORO-LA VELA RAILWAY. The Coro-La Vela Eailway (Venezuelan capital) is only 8J miles long, and its construction cost is 1,040,000 bolivares ($200,720). It connects the port of La Vela with the city of Coro, and is national property. It is operated by Sr. Jose M. Capriles as agent of the. Government. The road has 2 locomotives, 1 passenger car, 1 flat car, and 1 box car. Gross receipts were 68,098 bolivares in 1898, and 35,893 bolivares in 1915. For the 8§ miles the price of passage is 2 bolivares (38.6 cents), and the freight on a ton of merchandise 20 bolivares ($3.86). Lower rates have been authorized for freight, but in the correspondence it was stated that these were to be temporary, lasting only until the carters gave up competing with the railway and found other employment. At present the line barely pays ex- penses. LINES AND EXTENSIONS CONTEMPLATED OR SUGGESTED. The Caribbean Coal Co. obtained in 1917 a concession for a rail- way from deep water to its mining property on Lake Maracaibo. The plan calls for the construction of a port at Castilletes capable of admitting vessels drawing up to 35 feet at all times and provides that no port charges of any kind shall be collected. There is now about 16 feet of water at Castilletes. From the port a railway 150 kilometers (93 miles) long and with branches of 50 kilometers (31 miles) in length is to be constructed. The line is to be of standard American gauge and is to have a one-way capacity of 10,000 tons . daily. The maximum freight charges permitted are lower than the minimum now charged on existing lines in Venezuela. The coal on the property of this company is said to be of the very best quality and to exist in large quantity. The port of Castilletes will be only 595 miles from Colon. Its establishment as a free port in so far as port charges are concerned will probably affect adversely the prosperity of Curacao and will bring changes to Maracaibo. Should the construction of the port and railway and the development of the mines be carried out according to the program announced, this will be the most important industrial event that has occurred in Venezuela for many years. Caracas newspapers announced early in 1917 that Dr. Manuel Silviera and Mr. C. A. Hutchings were seeking a concession from the Government for the construction of a railway from El Palito, near Puerto Cabello, to the station of La Rosita on the San Felipe branch of the Bolivar Railway. At present the Bolivar Railway, which runs from the port of Tucacas to San Felipe and Barquisi- meto, is entirely separated from all other lines; the proposed link, about 40 miles in length, would connect it up with the road from Puerto Cabello to Valencia, and thus with the several lines radiating from Caracas, greatly facilitating communication between the capi- tal and the important States of Yaracuy and Lara. Mr. C. A. Hutchings, as previously stated, is the general manager of the Boli- var Railway. The Great Railway of Tachira holds a concession for 20 years from 1913 for the extension of its line to the city of San Cristobal, 382 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. and a preference for building thence to Periquera at the junction of the Apure and Uribante Rivers. The latter extension would extend into the plains, and would develop a large section of good cattle country. The Bolivar Railway contemplates several extensions and branches at some future time, but construction is not expected soon. The Great Railway of Venezuela has a concession for the exten- sion of its line from Valencia to San Carlos and the preferential right to construct a branch from Cagua to Villa de Cura and Calobozo, both San Carlos and Calobozo being situated in good but only slightly developed cattle country. A railway 108 kilometers (67 miles) long from Valencia westward through five towns to Nirgua in the State of Yaracuy has often been suggested, but as the country is rough it is possible that such a line could not be built cheaply enough to pay. The manager of the Puerto Cabello-Valencia Railway was granted a concession for a cableway over this route. The excellence of the harbor of Guanta has suggested many projects for roads thence into the interior, but as these districts are practically uninhabited every one of the proposed roads would have to await a problematical development of the country before getting returns. In the southernmost States of Venezuela and in eastern Colombia land values are merely nominal, but with adequate transportation this would be one of the great meat-producing areas of the world, with the advantage of being thousands of miles nearer to consuming centers than Australia or the River Plate. Running for the most part over level, treeless plains, a railway would not be costly, but notwithstanding this fact there is no indication that its construction is being considered at present. NEW LAW GOVERNING RAILWAY CONCESSIONS. A new law governing railway concessions passed the Venezuelan Congress and was signed by the Provisional President June 12, 1917. The principal difference between this law and the former one is that the provision by which all railways constructed under concessions be- came the property of the Government after a specified term of years is changed, and railways to be built under the new law will be fully and perpetually the property of the parties constructing them except that such ownership may not be transferred in whole or in part to any foreign Government. It is hoped that under the more liberal terms of this new law foreign capital may undertake the construction of railways which the country so badly needs for its internal development. SECURITIES AND QUOTATIONS OF BRITISH-CONTROLLED LINES. The following table will indicate the amount of securities out- standing and the quotations thereof of important British-controlled railways in Venezuela: SOUTH AMERICA VENEZUELA. 383 Securities. Amount High price since 1911. Price January, 1918. LA GUAIRA-CARACAS RAILWAY." Stock 5 per cent debenture stock redeemable 1982 PUERTO CABELLO-VALENCIA BAILWAY.& Shares (£10 par) 5 per cent first-charge bonds 5 per cent second-charge bonds BOLIVAB EAILWAY.il Ordinary shares (par £1) 5 per cent preference shares (par £ 1) 6 per cent debenture stock 6 per cent scrip CENTRAL RAILWAY OF VENEZUELA. Stock 6 per cent first debentures / 6 per cent second debentures : £350,000 370,000 95 100 78 460,000 170,000 170,000 3J 95 («) 3 74 683, 200 292, 800 250, 000 23,241 18s. 9d. 17s. 6d. 106 7s. 2d. 13s. 83 80J 200,000 240,000 134,000 (0 («) 48 121 o Dividends of from 5 to 8 per cent per annum have been paid during the period 1910 to 1917, inclusive (1917 dividend, 5 per cent). 6 A dividend of 10s. was paid on the stock in March, 1917. c No longer quoted. & Preferred dividends have been at the annual rate of 5 per cent, 1910 to 1913; the 5 per cent declared in 1914 and the 3 per cent in 1915 were paid in 6 Der cent scrip, as above, to be converted into 6 per cent deben- tures prior to Dec. 31, 1918, or, if not converted, to be paid off at par as soon as possible. All subse- quent preference dividends have been at the full rate. In 1912-13, 2 per cent was paid on the ordinary stock; no other dividend on this stock has been paid. t Not quoted. / Interest on first debentures is dependent on income until paid in full for three consecutive years; rate for 1917, 3 per cent PUBLIC UTILITIES. Public-utility development in Venezuela has progressed along modest lines. A number of the larger cities and towns have electric lights and there are electric traction lines or tramways otherwise propelled in Caracas, Valencia, Maracaibo (two), La Guaira (the line to Macuto), and Cumana. There is a large telephone company in Caracas, which reaches out into the country, and a smaller local concern operating to the eastward of Caracas. The capital city is the home of a substantial number of public-utility enterprises, most of which are described in the Appendix (see p. 526). The Caracas Electric Co. utilizes El Encantado Rapids in the Guare River for the generation of the power. The fall of the rapids is HI feet and the horsepower developed is 1,050. Another plant at Los Na- ranjos, 2 miles higher up the river, furnishes an additional 1,500 horsepower. The water supply in the important centers is said to be good and ample. Merida, capital of the mountain State of the same name, is one of the electrically lighted cities ; the power is furnished by the torrential Chama River, the plant being located at a point somewhat above the city. At last accounts the number of lights installed was far in excess of the capabilities of the existing power plant, although much greater horsepower might readily be obtained. There is, needless to say, still much to be done in the public-utility development of the Republic. 384 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. MINING ENTERPRISES. There are four minerals existing in the Republic of Venezuela that have become commercial commodities — copper, gold, coal, and iron. COPPER. Copper ores are known to exist in the States of Carabobo, Lara, and Merida. The important mines worked to-day are the Aroa mines owned by the South American Copper Co., a British com- pany. These were formerly operated as the Quebrada mines, and were worked by aborigines before the coming of the Spaniards. Early in the nineteenth century a company, with head office at Balti- more, Md., operated the most important of these mines and obtained about 43,000 tons of high-grade carbonate and oxide ores. Later the mines were taken over by Venezuelan interests and still later by a British company. The Venezuelan company, it is said, obtained about 100,000 tons of medium and high grade ore. Between the years 1873 and 1894 the mines were actively operated by the Quebrada Land & Copper Co., and about 271,770 long tons of ore were pro- duced. The maximum production during this period was for the year 1891. Adverse political conditions, a severe flood, and declining prices for the mineral brought about the closing of these mines, and operations remained practically at a standstill until the South American Copper Syndicate was organized in 1907 to acquire and work the property. The capitalization of this company is only £15,000 (par 2s.), and phenomenally large dividends have been paid. In 1908-9 the rate was 25 per cent; in 1909-10, 30 per cent; 1910-11, 145 per cent; 1911-12, 250 per cent; 1912-13, 350 per cent; 1913-14, 75 per cent; 1914-15, 62J per cent; 1915-16, 150 per cent. Only ore averaging 8 per cent or more was shipped to Europe for smelting purposes. The company decided several years ago to erect a smelter to treat the lower-grade ore that exists in large quantities. The com- pany is being repaid for its investment in the property many times over, and its shares command a very high premium. The mines are located along the line of the Bolivar Railway, which runs from the port of Tucacas to Barquisimeto, and the copper forms the principal source of revenue for the railway. Copper mines were worked with profit, in former times, at Sebo- ruco, Bailadores, and other places in the Andes and the Caribbean hills. The industry seems to hold the promise of satisfactory de- velopment when better means of transportation are available. GOLD. Gold has been found in almost every State in Venezuela. In Guayana large quantities of the mineral have been produced, and new discoveries are being rather frequently reported. El Callao mine, located near Guasipati, a town situated on the right bank of the Yuruari River, was formerly important. The mine was worked by the Indians in early days, as were numerous other gold discov- eries in the neighborhood. In the year 1870 the El Callao Mining Co. was formed and during the period 1871 to 1892 paid in dividends the sum of 48,322,000 francs, or £1,933,288. The company during the later years of its existence became involved in lawsuits, and very SOUTH AMERICA VENEZUELA. 385 little work has been carried on since dividends were suspended in 1892. Other mining properties that have been operated at various periods include the Chile, Choco, Nacupai, Potosi, Union, Victory, etc. Under existing conditions Venezuela offers better opportunities for the individual prospector than for the large companies equipped with costly machinery. Transportation and freight costs to the mines, most of which are not easily accessible, are prohibitive, and there are many other difficulties to be encountered. In the Amazonas Territory gold is produced, the natives carrying considerable quantities of the dust into British Guiana to exchange for rifles and ammunition. There is a large stretch of country in this Territory that is similar in composition to the gold-producing areas in which the El Callao mines are located. This mining coun- try, however, is almost inaccessible. It may readily be seen that lack of proper transportation facilities greatly retards the development of the gold-mining industry. The distance of 130 miles from the port of San Felix (on the Orinoco River, below Ciudad Bolivar) to Guasipati requires a journey of from 10 to 20 days ior wagons, the trail being frequently a sea of mud. Once railways or automobile roads are opened into this in- terior fastness, the probabilities are that the gold industry will greatly increase in importance. COAL AND IRON. Coal has been found in various sections of the Eepublic. The quality of the mineral is fair, and the product is in great demand locally. The principal mines are at Naricual, about 16 miles from Barcelona. The coal there is of a later geological period than British coal and is a bright burning variety. It is used on the various local steamers and on some of the railways, and is also mixed with pitch from Trinidad into briquettes. The Guanta Railway, the coal mine, and a small briquette factory are all local industries controlled and operated by Venezuelans. Small coal mines have been operated on and near the shores of Lake Maracaibo, and out- croppings have been found in the States of Merida, Tachira, and Trujillo. A mine was opened a short time ago along the Unare River, about 120 miles from La Guaira and about 15 miles west of the Naricual mines. The mine is said to be located less than 5 miles from tidewater and immediately upon the bank of the river. Pro- duction was stated to amount to upward of 20 tons a day, with prospects of considerable future increase. According to Consul Homer Brett, of La Guaira, the mine is under the management of Dr. Andres Hernandez Caballero, Puerto Unare. The iron-ore deposits of Venezuela occur mostly in the extreme eastern section of the Republic. Ore has been snipped from the country at various times, a consignment of several hundred tons sent to the United States in 1901 being examined and described as magnetic carrying upward of 60 per cent of ore. In 1910 a com- pany, known as the Canadian- Venezuelan Ore Co. (Ltd.), was formed and received a concession for the whole of the known iron- bearing territory. The company agreed to pay to the Venezuelan 63018°— 18 25 386 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. Government $0.20 per ton of ore, in addition to an initial payment, until $385,000 had been paid, and $0.10 per ton thereafter, lhe capitalization of the company consisted of $1,000,000 first-mortgage 6 per cent bonds due 1927 and $4,347,500 common stock. The enter- prise was presumably unsuccessful, and the company went into liquidation in 1913. OTHER MINERALS. Salt constitutes a Government monopoly. It is gathered in the State of Zulia, and a large amount is annually shipped into Co- lombia. The salina of Araya, located on a peninsula of the same name, not far from the port of Cumana, is probably the most im- portant salt deposit in the Republic. This is an extensive surface deposit of pure sodium chloride. The usual method employed in gathering the salt is to dig pits and fill them with water in such a way as to dissolve the salt of the surrounding sands and clays, to be later evaporated to dryness in the sun. Salt deposits also occur near Barcelona, on the island of Coche (near the Peninsula of Araya), and elsewhere. Sulphur exists about 11 miles inland from the port of Carupano in what appears to be commercial quantities. A company, incorporated in Germany, was formed in 1903 to work this deposit. The capitali- zation of this company was said to have been 2,000,000 marks. A very large variety of other minerals have been located in various portions of the Republic, but presumably none of them have as yet been developed commercially. The mineral resources of the country are certainly very great, and a promising future is surely in store for the industry, once better systems of roads, railways, and other means of interior communication are established. PEARL FISHERIES. The pearl fisheries of Margarita Island have been of importance for centuries, although the production of modern times has been far less than during the early days of Spanish rule. Pearling is the chief industry of the island and its neighbors, and a large number of the inhabitants are employed on the sloops and pearling vessels. Ap- proximately 400 boats and 1,600 people were engaged in the work according to recent statistics. Mother-of-pearl is also a commercial product of Margarita Island. THE PETROLEUM INDUSTRY. The petroleum fields of Venezuela have attracted a good deal of attention during the past three or four years. New deposits are coming to light from time to time, and a fair amount of American, British, and Dutch capital is being attracted. The Government of Venezuela is doing what it can to assist in the development of the industry. The principal fields thus far located are: (1) The Bella Vista, near Maracaibo; (2) in the Mara district, near the Liman River asphalt lake; (3) on the Sardinate River, which runs into Colombia ; (4) in the district of Colon, State of Zulia, south of Lake Maracaibo (largest field in Venezuela) ; (5) in the district of Sucre SOUTH AMERICA VENEZUELA. 387 on Lake Maracaibo; (6) the Peri j a field, to the west of Lake Mara- caibo; (7) the Pedernales field in the delta of the Orinoco, where one of the river outlets empties into the Gulf of Paria. This last is on the properties of the General Asphalt Co. (see p. 391). An extensive article, " Venezuela's Petroleum Industry," written by the American Minister to Venezuela, Hon. Preston McGoodwin, is here reproduced in full: 1 There are in Venezuela six petroleum companies engaged in devel- opment work on an extensive scale — the Caribbean Petroleum Co., the Colon Development Co.; the Venezuelan Oil Concessions (Ltd.), the Venezuela-Falcon Oil Syndicate (Ltd.), the Bermudez Co., and the Pauji Concession. CARIBBEAN PETROLEUM CO. The first-mentioned of these — the Caribbean Petroleum Co. — acquired what was known as the Tregelles concession from the General Asphalt Co., and during 1912 and 1913 employed a force of 35 experienced geologists, assisted by a great number of Venezuelan civil engineers, who covered nearly every foot of territory included in the concession. At the end of two years the company had staked out and definitely selected 1,028 areas of 500 hectares (1,235 acres) each, in which it intended, within the time allowed, to drill for oil. For its preliminary work the company selected two sections for drilling, one on each side of Lake Maracaibo, State of Zulia, in the extreme northwestern part of Venezuela. One of these sections is 16 miles east of the lake, where material has to be transported through swamps over a road built by the company. When the road was completed and properly screened houses had been erected for the employees, drilling equipment for three wells was immediately shipped in and drilling commenced in January, 1914. On this area the company has drilled six wells, from 600 to 1,700 feet in depth, in all of which oil has been found. Enough work has been done to prove conclusively that this is a commercial field. ' Most of these wells are capped. The company has erected three 55,000-barrel steel tanks, has laid a pipe line to the shore of Lake Maracaibo, and has built a refinery at the terminal of its pipe line at a place called San Lorenzo, 60 miles south of Maracaibo. This refinery began operations on August 16, 1917, and is expected to supply a large proportion of Venezuela's con- sumption of gasoline and kerosene. It has a daily capacity of about 2,000 barrels (of 42 gallons each). Every grade of oil except lubri- cants will be refined at this point. Pumps and pipe lines have been installed for loading tank steamers or barges, for the shipment of the oil from Venezuela. The field selected by this company on the western side of Lake Maracaibo is about 50 miles from the shore of the lake, and a road had to be built to it for the transportation of material through a flat but heavily wooded country. As on the east side of the lake, the company delivered to this site equipment sufficient for drilling three wells. Two wells were sunk to a level of about 1,000 feet and » The American Minister's report extends as far as the heading " Development of As- phalt Deposits," on page 391. 388 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. abandoned prior to April, 1915. In June, 1916, work was started on four additional weils in this section for testing purposes. The same company is developing areas in other sections, as it is required to do under the terms of its contract with the Government of Venezuela. Although the section on the east side of Lake Mara- caibo undoubtedly contains oil in quantities sufficient for commercial development, no information is obtainable upon which to base an estimate of probable future production. COLON DEVELOPMENT CO. Under what was known as the Andres Jorge Vigas concession, granted January 3, 1907, for oil rights in the district of Colon, State of Zulia, the Colon Development Co., an English corporation, com- menced drilling operations early in 1914. This company encountered difficulty in its geological exploration work, owing to roving bands of Motilones Indians. It was necessary to employ from 60 to 100 armed guards with the exploring parties, and a force of 50 to 60 guards has been kept at the drilling camps. Development was started by this company about 100 miles from the nearest settlement, and, although there are rivers for trans- porting material, it was necessary to expend immense sums in de- livering equipment. The first drill was started the latter part of 1914, and after great difficulties had been experienced with drillers and laborers the first well was abandoned at a depth of 700 feet. The company had just succeeded in drilling its second well on the Rio Oro. The depth attained is somewhat over 1,000 feet, and the oil is of light gravity. The capacity of this well is said to be approx- imately 200 barrels a day. However, means of transportation must be provided, and the company is now engaged in building roads for that purpose; also in drilling another well on the Rio Tarra, now said to have reached a depth of about 500 feet. The best information to be had from persons who are familiar with the territory occupied by the Colon enterprise is to the effect that the company will produce oil in commercial quantities. VENEZUELAN OIL CONCESSIONS. On February 28, 1907. a contract was granted to one Antonio Aranguren for the development of asphalt in the districts of Bolivar and Maracaibo of the State of Zulia, and on June 18. 1912, a decree was issued by the Government of Venezuela, bestowing upon the concessionaire the right to exploit petroleum. Some question has been raised as to the legality of this latter decree, but, notwithstand- ing protests made by other oil-producing companies, the decree has been allowed to stand. In the latter part of 1913 it was transferred, after preliminary geological investigation, to the Venezuelan Oil Concessions (Ltd.). This concern, which is a subsidiary of the Royal Dutch Co. for the Working of Petroleum Wells in Nether- lands India (Dutch Shell Co.), is incorporated in Great Britain with an authorized capitalization of £500.000, of which £355,000 has been subscribed and called up. Four drillers and an office staff and field superintendent were sent out from London late in 1913 by this company. Two wells were SOUTH AMERICA — VENEZUELA. 389 started immediately, one at a point on the shores of Lake Maracaibo called Santa Rita, and the other in the swamp just south of Santa Rosa, also located on the shores of the lake. Drilling in the Santa Rita well was carried to a depth of 1,600 feet without any trace of oil having been encountered. At Santa Rosa an oil sand of good promise was encountered at 800 feet, and at 1,500 feet another sand was found which produced oil of about 20° B. Undoubtedly upon striking this last sand a great quantity of oil was produced, but 10 days after the strike the production was not more than 10 barrels a day. Apparently no attempt was made to pump this well, and it seems to have been abandoned. The company encountered very great obstacles because of the general unhealthful conditions under which the men were compelled to work and the impossibility of keeping them protected from the very dangerous malarial mosquito found in those localities. Also, the company seemed to realize, about the middle of 1914, that the system used in drilling was not suitable to the conditions and placed an order for drilling equipment in the United States. It was planned to start work with this new machinery immediately, but operations were seriously hampered by the outbreak of the Euro- pean war. Although work has been carried on continuously, it has been done with a very limited force, and no very satisfactory results have been obtained. At last accounts the company had succeeded in drilling seven wells, varying in depth from 600 to 1,800 feet and scattered over a considerable area. It has been reported that oil was found in five of the seven wells, and that at least two of them give promise of good production. VENEZUELA-FALCON OIL SYNDICATE. On July 22, 1907, there was granted what is known in Venezuela as the Bernabe Planes concession for the development of oil in the district of Buchivacoa, in the State of Falcon. After it had been offered for sale for a number of years an option was given in 1913 to an English company called the Venezuela-Falcon Oil Syndicate (Ltd.). After preliminary investigations lasting about a year ana a half, the company finally agreed to start development work, but it appears that the equipment has not yet been delivered. BERMUDEZ CO. On July 24, 1910, the General Asphalt Co., which owned the large asphalt deposit known as Bermudez Lake, situated in the extreme northeastern part of Venezuela at a place called Guanoco, obtained a concession for the oil rights in the vicinity of the lake ; also on the island of Pedernales and the peninsula of Paria. This concession, obtained by R. M. Valladares, was transferred to a subsidiary of the asphalt company called the Bermudez Co. Very soon after acquiring the right the Bermudez Co. sent a force of 10 geologists over its con- cession and finally selected 19 areas of 500 hectares (1 ? 236 acres) each in the vicinity of the asphalt lake, 6 areas on the peninsula of Paria, and 4 areas on the island of Pedernales. The terms of the concession of the Bermudez Co. called for almost immediate exploitation of all 390 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. areas selected. By June, 1913, wells were being drilled in all of the 29 areas. On the 6 areas on the peninsula of Paria wells were sunk deep enough to demonstrate the impossibility of producing oil in commercial quantities, and all of them were promptly abandoned. At Pedernales the company drilled seven wells ranging in depth from 200 to 1,000 feet, occasionally finding traces of oil, but not in sufficient quantities. In this region the company encountered great difficulties because of heaving sands, soft mud, and gas pressure, all of which made it necessary to adopt several methods of drilling. In the Guanoco area wells have been sunk in varying depths from 200 to 4,200 feet. In some of them a heavy oil, almost an asphalt, has been found, and invariably in fair quantities, but it is too heavy to pump. Two additional wells have been started in this region recently, but no commercial results have been obtained. The company has done considerable geological work to locate a proper place to drill where it could reach oil, which is still believed to exist in large quantities in that district. The operations of this company have been exceedingly difficult, because nearly all of the wells in the three regions described are located in swamps, and it has been necessary to lay portable tracks on trestles to transport drilling material. Although the general camp of the company was located at the same place as the headquar- ters of the General Asphalt Co., where several hundred employees are maintained constantly, yet the field camps have been in very unhealthful places and there has been considerable sickness among the employees. PAUJI CONCESSION. On January 16, 1909, a petroleum concession was granted to Joaquin Briceno on 3 hectares (7.4 acres) of land adjoining a place known as Pauji, 30 miles east of Lake Maracaibo. The right was secured doubtless because of the abundant evidence of asphalt seep- ages, which are very numerous in that locality. A company was formed in the city of Maracaibo with a large nominal capital but with only about $50,000 for actual work. An American has been investigating the property, and it is reported in Caracas that drilling machinery will shortly arrive. Stockholders are confident that devel- opment work will be pushed rapidly. In addition to the properties of the six companies above enumer- ated, there are not more than three or four ancient and modern con- cessions in existence, and no other development is now known to be in progress. OIL AND COAL DEPOSITS ADMINISTERED BY GOVERNMENT. A resolution of the Venezuelan Minister of Fomento (Develop- ment) , published November 28, 1917, provides as follows : The Provisional President of the Republic directs that in conformity with article 3 of the law of mines the petroleum and coal deposits in the States of Trujillo, Merida, and Zulia which are not already leased and which belong to no prWate parties or companies, shall be administered henceforth by the Federal Executive. In another resolution of the same date announcement is made of the appointment of an Administrator of Mines for the district men- tioned. SOUTH AMERICA VENEZUELA. 39l The purpose of these measures is to provide a new source of income. DEVELOPMENT OF ASPHALT DEPOSITS. The General Asphalt Co., an American corporation, leases for 99 years, through its subsidiary, the New York & Bermudez Co., the celebrated Bermudez Pitch Lake, near Guanoco, and fee-simple titles to 4,800 hectares (11,861 acres) of land underlying or surrounding the lake. The area covered by the pitch deposit is larger than the famous pitch lake of Trinidad, but the depth is said to be somewhat less. The capitalization of the General Asphalt Co. consists of $17,000,000 common stock, $14,000,000 preferred stock, $1,9QO,000 6 per cent gold debentures, and $1,083,975 New Trinidad Lake first- debenture sixes, due 1925. The General Asphalt Co. and its subsidia- ries reported gross earnings of $11,677,309 for the year ended Jan- uary 31, 1917, as compared with $15,279,352 earned during the year ended January 31, 1914. Surplus applicable to dividends reported in 1916-17 amounted to $921,965, as compared with $1,303,755 in 1913-14. Dividends of 5 per cent per annum have been maintained on the preferred stock for some years. The company's interests in petroleum concessions have been dealt with briefly in preceding para- graphs. Bermudez Asphalt Lake in eastern Venezuela and Trinidad Asphalt Lake in the island of Trinidad, British West Indies, are the two largest reservoirs of evaporated petroleum in the world. Ber- mudez Lake covers 1*100 acres, and the asphalt contained therein represents an outflow of 80,000,000 barrels of oil. There is a constant flow of oil, which spreads out over the lake, replenishing it. The seepages are found on a line from one end of the lake to the other, on its longest axis, up to a thousand feet wide. The immense accu- mulation of asphalt and the broad belt of active seepages are proof of oil-bearing formations below. At nearly all places in the world where commercial quantities of oil have been found underground, especially in much folded or faulted regions, adequate evidence of its presence is given by surface seepages. The structural conditions at Bermudez Lake are an anticlinal fold, along the crest of which the seepages occur, in which the folding strain caused fracturing, fol- lowed by cross folding and fracturing and faulting of the strata and the forming of a dome. The formation consists of massive black shale, a layer of coarse sandstone, and thick beds of fossiliferous limestone. The limestone is supposed to be the source of the oil and the sandstone its reservoir, whence it escapes to the surface along the fault line. Referring to the General Asphalt Co.'s interests in the petroleum deposits of western Venezuela, the company's reports for several years past have described conditions and progress. Several paragraphs from these various reports are here reproduced. The annual report for 1912 states as follows : Our subsidiary, the Caribbean Petroleum Co., has a concession from the Gov- ernment of Venezuela dated January 2, 1912, for the petroleum rights In the following States in Venezuela : Sucre, Monagas, Anzoategui, Nueva Esparta, Tachira, Trujillo, Merida, Zulia, Lara, Falcon, Carabobo, Yaracuy, and the delta of the Orinoco. The concession provides for an exploration period of two years, to be followed by a lease for 30 years of such parts of any of such States not previously occupied by similar concessions as we shall have filed upon in due 392 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. course for permanent operation in lots of 1,250 acres each, upon which we shall p>jr 8 cents per acre per annum land tax and a royalty on petroleum produced and shipped at the rate of 40 cents per ton, equal to about 10 per cent on oil produced and shipped. The company's report for 1915 stated that immediately after the concessions in western Venezuela had been obtained geologists were sent to investigate the field thoroughly. In the early stages of this work it became apparent that the total oil-bearing area covered by the Caribbean Petroleum Co.'s concession would be very large, and that the proper development of the field would require far more capital than the General Asphalt Co. cared to spend. Therefore it was de- cided by the directors, after consideration, that it would be wise to make arrangements whereby experienced and highly successful inter- ests possessing ample capital would undertake the development of this large property at their own expense and risk. The essential fea- tures of the arrangement entered into with such interests, as quoted in the annual report for the year 1915, were as follows : (1) A repayment to the company of its disbursements in connection with all of the areas in Venezuela other than those immediately adjoining the Bermudez Lake property, which areas have been reserved for the exclusive use of the company itself. « (2) A substantial participation in the entire net profits of the enterprise with- out obligation to furnish, any part of the capital required. (3) A contract for the life of the concession whereby the company has the right to purchase petroleum for its own business and purposes, with ample pro- tection to its asphalt business. After making these arrangements the work of exploration was continued under the immediate supervision and direction of the General Asphalt Co.. with increased field forces, and the most thorough examination possible was made of all oil-bearing areas in Venezuela. As a result of this work title was perfected to oil rights upon 1,028 areas of 500 hectares each, a total area of 514,000 hec- tares, .or about 1,259,580 acres. After the perfecting of title to these areas a period of three years is allowed by the concession for the purpose of commencing development work, which must consist of one well upon each area, with, however, the privilege under certain circumstances of securing one extension of three years additional for this purpose. The greater part of these areas lie in the wild and undeveloped portions of the country, but are reasonably accessible to the shores of Lake Maracaibo, whence oil may be transported by pipe lines and thence by tank steamer. Of the total of 1.028 areas of 500 hectares each. 789 areas are in western Venezuela, in the Maracaibo region, and 239 in eastern Venezuela, accessible to the Gulf of Paria. Assuming that after further critical examination a considerable percentage of these should ultimately be abandoned, there still would remain an enormous area for development, requiring the immediate expenditure of many millions or tens of millions of dollars. A few years ago a German company acquired a concession to de- velop asphalt deposits at Pedernales. A small amount of asphalt was shipped, but the company, after an ineffectual struggle, finally abandoned the property. The asphalt and oil refineries are now in. ruins. FOREST PRODUCTS. The forest resources of the Territories of Guayana and Amazonas are unlimited. In the Guayana forests will be found the giant mora tree, averaging 3 feet in diameter and seldom branching at less than 40 feet from the ground. This timber, dark-red grained, is said to be most excellent for shipbuilding purposes. Mahogany, Venezuelan rosewood, and other hardwood trees are found in pro- SOUTH AMERICA VENEZUELA. 393 fusion. . In Venezuela the same difficulty is met with as in the forests of British Guiana — namely, the growth of a very mixed assortment of trees, this difficulty standing in the way of profitable development unless such development is carried on in a very extensive way. Wild rubber, balata, vanilla, tonka beans, and other products of the tropical forests are gathered and exported largely through the Orinoco River port of Ciudad Bolivar. Some mangrove bark is also shipped abroad, as are a few Brazil nuts. It is safe to estimate that more than 50 per cent of the entire area of Venezuela is under forests. It .is therefore evident that, as the country develops through the possible influx of population, more attention will in future be given to the vast forest resources, espe- cially with the improvement in transportation facilities that is cer- tain to follow immigration. STOCK RAISING AND THE MEAT INDUSTRY. The cattle-raising industry of Venezuela is capable of great de- velopment. Much has been said concerning the capabilities of the vast llano territories for the raising of cattle, and the accounts given of the richness of the grasses of these vast plains are not greatly exaggerated. Although certainly inferior to the pampas country of Argentina, the llanos are nevertheless capable of afford- ing pasturage for vast numbers of live stock. Leonard V. Dalton, in his book "Venezuela," says concerning the possibilities of the live-stock industry: No visitor to Venezuela who penetrates far enough into the country to catch a glimpse of the llanos can fail to be impressed with the possibilities of the country in stock raising and exporting, and yet this great area of pasturage supports, in proportion to its extent, a mere handful of cattle and horses. The quality of the grass of the llanos may be inferior to that of the Argentine pampas, but even such a defect, if existent, may be improved in time, and so far (1912) no pedigreed stock have ever been introduced, nor has the industry ever been seriously handled. In 1804, according to Depons, there were 1,470,000 cattle, horses, and mules on the llanos, and by 1812 the number had increased to 4,500,000 ; but during the wars of independence, owing to the depreciations of the opposing armies, the number was greatly decreased, and in 1839 was still only a little over 2,000,000. In the meantime,- however, the excellent qualities of the Bar- quisimeto table-land and the Coro and Maracaibo lowlands for breeding goats had been discovered, and the export of goats' horns and hides has been con- tinuously an important item in the trade of western Venezuela. In 1888 the number of head of stock on the llanos had increased to 8,500,000, and at that period rnany were exported to the other States and islands of America — a few even to the United States. Ten years later revolutions and counter-revolutions had decreased the number to 2,000,000. The establishment of the Venezuela Meat Products Syndicate works for ship- . ping frozen meats from Puerto Cabello should do much to encourage an indus- try as yet in its infancy and yet of incalculable interest to the country, once properly developed. Estimates of the total number of cattle in Venezuela at the present time vary from 3,000.000 to 9,000,000. It is probable that 3,500,000 would be a conservative estimate. Judging from the number of hides exported it seems probable that about 500,000 to 600,000 cattle are killed yearly. Thanks to existing high prices the stock-raising industry is at present prosperous. In 1915 it was stated that there were registered in the Republic 1,288 breeders with approximately $20,000,000 invested capital. The breeding of stock has begun to 394 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. show slight improvements owing to the distribution of a better grade of stock. The slaughter of cows is prohibited by the Government. AGRICULTURE. The principal agricultural products of Venezuela are coffee, cacao, and sugar. The coffee trade of the Republic is normally very large, amounting in the year 1913 to 83,921 tons. Coffee was originally introduced into Venezuela near the close of the eighteenth century, and the northern hills and ranges are at present dotted with rich plantations. The best lands are located at an altitude of slightly more than 3,000 feet, although coffee grows readily in Venezuela at any altitude between 1,500 and 6,500 feet. The life of each coffee bush is said to be 50 years, and the quantity produced per tree is one-fourth to one-half pound annually. Exports of coffee for 1916 totaled $10,552,543. The cacao of Venezuela is of a high quality and is produced in large quantities in the Maracaibo Lake, Caracas, and Orinoco Delta districts. The amount of cacao exported in 1916 was 15,183 metric tons, compared with 18,281 tons in 1915. The Republic in 1915 ranked seventh among the nations of the world as a producer of cacao and third among the Republics of South America. The sugar industry of Venezuela is showing splendid progress and is attracting much attention from the outside world. Each year witnesses the construction of new mills, the installation of modern improvements, and the planting of additional acres under sugar cane. The climate of northern Venezuela is well suited for the growth of the cane, and the industry seems destined to develop very greatly in the future. Among the important companies in the field may be mentioned the Tacarigua Industrial Sugar Co. at Macaray, which has installed a mill capable of crushing nearly 1,800 tons of sugar daily; the Petare Sugar Co., with a 400-ton mill; the La Ceiba Sugar Co., at La Ceiba; the Venezuela Sugar Co., of Delaware, at Bobures; the Zulia Central Sugar Co., at El Banco; and the Union Agricola de Maracaibo. Most of these companies maintain their local offices at Maracaibo. Much of the sugar is used locally for distillation or for general purposes; some is exported, the export trade in the prod- uct being probably destined to increase considerably in the future. Tobacco, cotton, maize, wheat, rubber, manioc, and other products are also raised. A small amount of the plantation rubber is ex- ported, as is also an occasional shipment of manioc. MANUFACTURING. Despite the high import duties generally prevailing in Venezuela, manufacturing has made but little progress. There are several cot- ton mills in Valencia, their production, though of fair quality, being insufficient for the needs of the community. The tanning industry has made some progress, there being factories devoted to the manu- facture of shoes, boots, and saddles. Matches are a Government monopoly, and their manufacture is carried on by a British company, the National Match Factory of Venezuela, capitalized at £219,967. Dividends have been usually 6 to 7 per cent per annum (see p. 528 of the Appendix for description of company's finances). Paper SOUTH AMERICA VENEZUELA. 395 and glass, neither of the best quality, are manufactured, and there are a number of cigarette factories variously located. There are two important brewing companies in the Republic, the Cerveceria Na- tional, at Caracas, Valencia, and Puerto Cabelloj and the Cerveceria de Maracaibo. The approximate capitalization of the two com- panies is 2,500,000 bohvares and 1,700,000 bolivares, respectively. The Maracaibo company produced 321,195 gallons of beer in 1914 and 252,850 gallons in 1915. The Cerveceria National dates from the year 1894." Its original capitalization was 600.000 bolivares, the amount being increased to 2,500,000 bolivares in 1901. Coal and electric power are both expensive, and it is believed that, following the completion of the petroleum refinery at Curasao, considerable oil, produced locally, will be used for fuel. FOREIGN CAPITAL IN VENEZUELA. An estimate made in the year 1916 indicated that British invest- ments in Venezuela amounted to approximately $39 905,300 United States currency. This included large holdings in Government ex- ternal bonds, shares and debentures in four railways (the La Guaira- Caracas Railway, the Puerto Cabello- Valencia Railway, the Bolivar Railway, and the Central Railway of Venezuela), interests in public- utility enterprises at Caracas, the National Match Factory, certain petroleum undertakings, etc. A very fair amount of American capital has found its way to Venezuela. The interests of the General Asphalt Co. are large, the Caribbean Petroleum Co. and other American interests are im- portant factors in the oil development of the Republic, and there are sugar enterprises financed in the United States. American banks have recently entered the field. The location of the Republic geo- graphically is favorable to closer financial intercourse with the United States. German interests hold a number of Government bonds, control the Great Railway of Venezuela, running from Valencia to Caracas, etc. France has from time to time controlled mining enterprises of more or less importance and has been interested in balata and rubber enterprises. The La Ceiba Railway, a local line of some importance, was constructed by French engineers, but whether any shares are held abroad is unknown. The Royal Bank of Canada, a well-known Canadian institution, has recently opened a branch in Venezuela, while the Venezuelan- Canadian Ore Co. was a Halifax enterprise. Part 1.— CENTRAL AMERICA. BRITISH HONDURAS. INTRODUCTION. England's Central American colony, British Honduras, has an area of 8,598 square miles, and is bounded on the north and north- west by Mexico and on the west and south by Guatemala. The population of the colony is approximately 42,000, of whom about 13,500 reside in Belize, the capital. This city is the principal seaport and by far the most important center in the colony. A very large proportion of its population consists of negroes. Other important towns are Orange. Walk, Stanri Creek, Corozal, and Punta Gorda. BONDED DEBT. The total bonded debt of British Honduras, as of the year 19if>, amounted to £194,735, as compared with £34,736 in 1905. Part of the proceeds of bond issues has been used for the construction of the Stann Creek Railway (see a later paragraph). The annual charges on the debt amount to £9,390, as compared with £2,175 in 1905. The total revenue for the colony in 1915 was £103,718, as com- pared with £63,742 in 1905. The bond issues of the colony consist of (1) £9,000 4£ per cent bonds, dated 1888 and due 1918, repayable by means of a 2 per cent sinking fund, cumulative ; (2) £20,000 4|- per cent debentures, dated 1894 and due 1923, the sinking fund being 2 per cent per annum, cumulative; (3) £160,000 4 per cent 10-year bonds, principal payable 1921 and convertible until 1920 into 4 per cent inscribed stock, matur- ing in 1971 and with a sinking fund of 1 per cent per annum. Inter- est on both bonds and inscribed stock is payable January 1. The loan is now represented by bonds £43,100 and inscribed stock £116,900. The bonds and inscribed stock are not actively quoted. BANKING. The banking facilities of the colony are provided by an agency of the Royal Bank of Canada. There would hardly be any opportunity for the location of an American bank there, although it may be noted that the United States normally buys more than three-quarters of the colony's exports and sells about one-half of what the colony buys. RAILWAYS. British Honduras possesses only one railway that may be called a common carrier. This is the Stann Creek Railway, 25 miles, running 397 398 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. from the minor port of Stann Creek inland toward the foothills of the Cockscomb Mountains. The railway has erected a pier near the town,. and a breakwater enables steamers to load and unload in safety. The cost of the line was approximately £173,000. Gross receipts for 1914-15 were approximately $28,200 and expenses $54,000. No further particulars are obtainable. The railway's limited freight traffic consists mostly of bananas and lumber. In addition to the Stann Creek Railway, there is a small mileage of privately operated tramways to agricultural and timber properties. These lines are of little importance. There have been projects from time to time for the construction of a line to extend across British Honduras and into the Peten district of Guatemala. This would open to the world seme of the finest known tracts of hardwood forests, both in Guatemala and British Honduras. The construction of such a line would be fairly costly and would probably hardly warrant the investment, unless carried out by a company sufficiently supplied with capital to cut enough timber to develop a large proportion of the traffic. Doubtless this proposed line, through the construction of spurs and branches to reach various timber stands, would in time earn a substantial profit, but its business as a common carrier, for a time at least, would hardly prove remuner- ative. The possible construction of this line is further discussed in the chapter on Guatemala (p. 416). PUBLIC UTILITIES. The public-utility field is, of necessity, a very limited one, being confined for the present decade at least to such opportunities as may arise following the possible further growth and development of the town of Belize, which at the present time has but few modern im- provements. At present its most important utility is a small electric plant, sufficient for its needs. PRODUCTS OF THE COLONY. British Honduras is primarily a producer of forest products. It contains fine forests of mahogany, rosewood, cedar, and other hard- woods, and is capable of supplying large quantities of chicle, rubber, cohune oil, mangrove bark for tanning purposes, logwood, etc. The logwood industry, once the most important in the colony, has been re- placed by chicle gathering and hardwood cutting. Chicle exports in good years have exceeded 2,000,000 pounds, valued at more than $600,000. The rubber industry in the colony has not assumed im- portance, being confined primarily to the gathering of wild rubber from the forests. The logwood supply has diminished, owing, it is said, to the fact that the supply within easy reach of markets has been nearly exhausted. There is said to be an abundance of the log- wood situated in more or less inaccessible places, which will doubtless be marketed at some future time. As has been stated, a very large portion of British Honduras is under forest. The splendid mahogany trees of the colony have been marketed readily and their exploitation has attracted fair sums of foreign capital, partly American; 10,000,000 feet might be con- sidered a fair annual yield and this production is likely, under normal CENTRAL AMERICA BRITISH HONDURAS. 399 conditions, to be maintained or exceeded for many years to come. The numerous rivers and creeks in the colony aid the lumbermen greatly, enabling them to transport the product at moderate costs. Much of the future in the mahogany industry will depend upon pos- sible railways or short railway spurs connecting with the rivers and creeks. Other hardwoods, such as rosewood and cedar, are cut and exported, although not in as large quantities as the mahogany. Man- grove bark is exploited in a moderate way, there being considerable quantities of .mangrove trees in the lower parts of the country and bordering the rivers and creeks. Pine is also found in large quan- tities, although it is probable that little could be done with it com- mercially. Labor conditions in British Honduras are not bad nor are wages excessive, and the general field offers an opportunity to those pro- vided with sufficient capital. Bananas, plantains, and coconuts are exploited in British Hon- duras and the various planters in the colony are said, on the whole, to be prosperous. The United Fruit Co. has not taken up banana growing there, and the total annual exports of this fruit do not ex- ceed $250,000. Coconut growing has been carried on with consider- able success, and of late years some attention has been given to sugar- cane. Little or no exploration work for minerals has been done in Brit- ish Honduras. There are no mines of any description in actual operation. One of the largest companies operating in British Honduras is the Belize Estate & Produce Co., a British corporation, capitalized at £70,000 stock (£60,000 paid up) and £30,000 debentures of 1920 and 1922. No statements of income are made public by the company, but dividend payments are generally at the rate of 10 per cent per annum. COSTA RICA. INTRODUCTION. Costa Eica, ranking fourth in area and fifth in population among the Central American Republics, is one of the most progressive countries in the Americas. School attendance is compulsory, with the result that wideawake communities have been developed, espe- cially in the mountain and plateau regions, which are the main cen- ters of population, Most of the country is healthful to live in, and the excellent sanitary arrangements as well as the precautionary laws enforced by the authorities tend generally to better conditions. The area of the country is 21,500 square miles (approximately; exact figures are not published), and the population as of Decem- ber 31, 1915, was 430,700, compared with 334,300 in 1905 and 275,880 i» 1895. The birth rate in 1915 was 44.5, and the death rate 22. San Jose, the capital and largest city, has a population of 35,650. The city has tramways, electric lights, a splendid water supply, and every modern improvement. Other important cities of Costa Eica are Heredia (population 8,240), Port JLimon (population 7,845), Alajuela (population 6,480), Punta Arenas (population 4,800), and Cartago (population 4,840). BONDED DEBT. The Republic of Costa Eica has outstanding two external loans, as follows: (a) Four to five per cent gold refunding bonds of 1911. — These bonds were issued to the amount of £2,000,000 in 1911, largely to pro- vide for the conversion of the external debt and the internal Port Limon sanitation bonds, the balance being used to provide funds for general purposes. The new bonds bear interest at the rate of 4 per cent per annum for the first 10 years from 1911, and at 5 per cent thereafter. A sinking fund commences operation in 1921. This sinking fund, which will amount to 1 per cent per annum, cumulative, will retire by January 1, 1958. The bonds are secured by a first charge on all the customs duties of the Eepublic, the pro- portion necessary to maintain the service to be paid over each month to the agent designated by the parties to the contract. No charge may be made on the customs duties in priority or equality to this issue. The bonds described above were quoted on the London Stock Ex- change in January, 1918, at 47, this comparing' with the high price of 70f and the low price of 42 since 1911. The yield on the bonds if held until the final maturity date would considerably exceed 10 per cent per annum. It is stated that a portion (presumed to be £413,340) of the bonds are either owned by the Government or pledged as guaranties of credit. 400 CENTRAL AMERICA COSTA RICA. 401 (b) External 5 per cent loan of 1911. — In 1911 the Government of Costa Eica arranged for a loan of 35,000,000 francs with bankers of France, Germany, and the United States. This, the 5 per cent external gold loan, was contracted for at 80 per cent, the proceeds to be used to redeem the debt of the Pacific Eailway of Costa Eica and a portion of the internal debt. The bonds are redeemable in 40 years from January 1, 1916, by means of a sinking fund and are secured by a first mortgage upon the revenues of the alcohol and liquor monopoly. The bankers purchasing this loan were given preferential right for a period of five years in any new financial op- eration of the Eepublic. No market quotation of this loan is available. The principal internal bond issues of the Eepublic consist of a 1,200,000-colon 6 per cent loan of 1914-1925 and a 2,000,000-colon 10 per cent loan, floated in 1917. The Costa Eican debt, although fairly large, represents large expenditures for railways, sanitary im- provements, local improvements, ports, etc. The European war seriously affected the revenues of the Government, but the service of the loans has been taken care of regularly and promptly. None of the municipalities or Provinces have any funded debt, so far as can be ascertained. After the conclusion of the European war San Jose will probably arrange a bond issue to provide funds for local street improvements. The municipal slaughterhouse and its receipts, also certain public-utility revenues, are available as col- lateral. While a comparison of tax rates and conditions governing the levying of taxes in Latin America and- the United States is im- possible, it may be said that the taxpayer of San Jose does not pay to the municipality more than one- fourth of 1 per cent of the prop- erty valuation each year. In the event of this loan being negotiated, it is probable that most of the necessary supplies would be pur- chased in the United States. BANKS. At the present time banking facilities in Costa Eica are provided by three public banks (Bank of Costa Eica, Anglo-Costa Eican Bank, and Mercantile Bank) , three private banks, and one agency of a foreign bank (Eoyal Bank of Canada). The last mentioned is highly successful. This branch of the Eoyal Bank of Canada is said to realize a substantial profit on loans to coffee estates secured by the crops. These loans pay from 6 to 9 per cent, and the creditor is amply protected, the laws governing these transactions being ad- mirably suited to the situation. In addition there was formed, following the outbreak of the war, a Government bank of issue, the International Bank of Costa Eica — an institution to have 'existence only during the European crisis. The shares of the three public banks named above are held locally, and the directors are Costa Eicans of high standing. RAILWAYS. The railways of the Eepublic consist of the Pacific Eailway of Costa Eica and the Northern Eailway of Costa Eica (with its leased line, the Costa Eica Eailway). The first named, extending from 63018°— 18 26 402 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Puntarenas. on the Gulf of Nicoya (Pacific coast) , via Alajuela, to San Jose (69 miles), is owned and operated by the Costa Rican Government. This railway handles a very fair amount of traffic, especially passenger traffic, but suffers from a lack of steamship tonnage calling at Puntarenas. Freight rates are reasonable, and the management is good. During 1913, 1914, and 1915 traffic handled was as follows : Items. 1913 1914 1915 76,654 232,841 $351,348 8331, 261 $20,087 67,959 208,043 $347, 700 $377, 476 & $29, 776 $318,264 $278,397 $39,887 n Metric ton=2,204.6 pounds. * Deficit. Expenses as shown above include expenditures made for improve- ment purposes and permanent betterments. The Government esti- mated that the revenues from the railway in 1916 would amount to $359,200. Increased passenger traffic has led to the putting into serv- ice of additional trains. The Northern Railway publishes no statement of earnings, it be- ing directly owned by the United Fruit Co. This railway transported 35,921 passengers in 1915 (39,195 in 1914), as compared with 535,396 passengers carried by the Costa Rica Railway (583,918 in 1914). Local freight, exclusive of bananas, amounted to 9,445 metric tons in 1915 (17,160 tons in 1914). A fair amount of timber was also handled. The total number of passengers carried by the Costa Rican rail- ways in the year 1915 was 779,360, as compared with 855,954 in the year 1914. The total railway mileage in operation throughout Costa Rica, as of December 31, 1915, did not. exceed 450 miles. Recent con- struction work has been confined to the various United Fruit Co. lines, which extensions are built solely to meet the requirements of the banana trade. The Republic needs additional railway mileage, particularly in the States of Guanacaste and Alajuela. The possibilities of a new line have been brought to the attention of the writer. This railway would start at Puntarenas and strike northward through Guanacaste toward the Nicaraguan frontier. Connections could readily be afforded with Lake Nicaragua, and later with the Pan American line through Cen- tral America. The railway as represented to the writer would strike across the mountains, thence eastward through the little-developed northern section of the Republic, to reach eventually the United Fruit Co.'s lines in Limon. The cost of this railway would not exceed $25,000 per mile, it is stated, and the proposed line would throw open the rich mining territory of Guanacaste and would make available for settlement and development the fine northern districts of the Re- public, said to contain large amounts of hardwood and other timbers and extensive agricultural and banana areas. The bananas would find a market through the United Fruit Co. The Nicaragua connec- tion would, it is stated, bring a fair amount of cattle traffic to the railway. CENTRAL AMERICA — COSTA EICA. 403 Whether such a railway would pay is problematical and would depend largely upon how the undertaking was carried out. A large portion of the country traversed would be virgin wilderness, which, however, contains sufficient wealth to assure a large amount of traffic, once developed. Construction difficulties are said to be not great. If worked by a company having sufficient capital to cut the timber, work the mineral areas, and generally explore and develop the country, this undertaking would be likely to prosper. Including the Costa Rica Railway, the Northern Railway of Costa Rica, etc., the total railway mileage of the United Fruit Co. in Costa Rica, as of September 30, 1917, was 330, and the tramway mileage 230. Fifty-three locomotives and 949 cars were in service, and 534 -additional cars were used "on the tramways. The total investment of the United Fruit Co. in railway lines in Costa Rica amounted to $2,840,268 and in tramways to $204,479. COSTA EICA RAILWAY. The Costa Rica Railway was originally incorporated in 1886, to take over then existing lines in Costa Rica and to construct addi- tional mileage. At the time of the incorporation of the company the lines were being operated by Mr. Minor C. Keith under lease from the Government, and this new arrangement was made on behalf of the holders of the external Government bonds of the Republic. The Government transferred its railways for a period of 99 years from the completion of the new lines, and conveyed to the company 800,000 acres of land in consideration of the allotment to the Government of one-third and to the bondholders of two-thirds of the company's share capital. Such of the lands as were unsold or had not been utilized in 1904 reverted to the Government. All rolling stock and supplies for construction purposes may be entered customs free. Under date of July 1, 1905, the United Fruit Co. entered into an agreement to work the line until within two months of the final date of the lease, transferring its operation to a subsidiary, the Northern Railway of Costa Rica. The Northern Railway was to pay an annual rental for the property, this rental amounting at present to £149,100 per annum. This is the maximum amount payable, unless additional debentures up to £20,000 are issued. The Costa Rica Railway has outstanding £1,800,000 stock, on which dividends of 2 per cent per annum have been paid during recent years. The debenture issues consist of the following : (1) £200,000 prior mortgage 5 per cent repayable prior to 1933, through the operations of a sinking fund. Approximately £130,000 of these debentures remain outstanding. (2) £180,000 prior mortgage debentures (second series) bearing interest at 5 per cent per annum, March and September 1 (similar date for first series), the principal being repayable by sinking fund on or before 1941. Approximately £150,000 of these debentures re- main outstanding. (3) £655,000 first mortgage 6| per cent debentures, issued Septem- ber 1, 1916, to extend maturing 6 per cent first mortgage debentures. All of these debentures remain outstanding. A cumulative sinking fund of £3,000 per annum commenced operation July 1, 1917, this Brim to be used to purchase these debentures and second-mortgage 404 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. debentures (see following). The company may not pay a dividend on its stock in excess of the present rate, 2 per cent, until the sinking fund shall be equal to one-half of the first-mortgage and second-mort- gage debentures for the time being outstanding. The company re- serves the right to retire the debentures at 103 and interest until Sep- tember, 1921; at 102 from September, 1921, until September, 1926; and thereafter at par. (4) £600,000 6J per cent second debentures, all outstanding, inter- est 6 per cent fixed and \ per cent dependent on income (see first- mortgage debentures, above). All the above securities are listed on the London Stock Exchange. Recent quotations have been as follows: Price Securities. price January, 19)8. Ordinary stock J ". . 50 25 5 per cent prior mortgage debentures 1 103 90 5 per cent prior debentures (second series) 1 03 90 6J per cent first-mortgage debentures -.. 6J per cent second-mortgage debentures a These were the high prices for the 6 per cent debentures due 1916. PUBLIC UTILITIES. San Jose has a good water and drainage system, and telephone service is maintained there and in various other parts of the Republic. As of December 31, 1915, 34 cities and towns had electric-lighting facilities and 88 cities, towns, and villages had water supply. The water-power facilities are good and sufficient for the country's needs. There is one tramway system in the Republic, namely, that oper- ated by the Costa Rican Electric Light & Tramways Co. This is a British concern, its securities being quoted on the London Stock Ex- change. In 1915, 1,809,823 passengers were carried. The line trav- erses the city and suburbs of San Jose and operates extensions to San Pedro del Mojon and Guadelupe. It is stated that this company and other public-utility properties in and about San Jose were to have been acquired by New York interests, but this transfer of control has been abandoned for the time being, at least. The company's balance sheet as of June 30, 1917, stated that the capitalization consisted of £130.000 ordinary shares, par £1, £187,750 5 per cent first debentures (original issue £197,150, £9,400 having been redeemed through sinking fund) and £98,900 prior lien 6 per cent debentures (original issue £100,000, balance retired through sinking- fund operations). The net earnings of the company, after charging all expenses in- curred, amounted to £14,381 in 1916-17, as compared with £19,211 in 1915-16. The final result after payment of all charges was a net deficit of £3,827. The disappointing results, it was stated, were due largely to the rise in the rate of exchange, business having been well maintained, despite the general dislocation in trade on account of the war. The sinking fund on the debentures of the Costa Rican Electric Light & Tramways Co. was suspended in 1915 until the May 1 follow- CENTRAL AMERICA COSTA RICA. 405 i ng the conclusion of the European war. The 5 per cent debentures were originally issued mostly at 90 ; they were quoted at 60 in Janu- ary, 1918. The 6 per cent prior debentures sold at 91 shortly before the outbreak of the European war. They are not actively quoted. The tramway line is 10 miles in length. In 1956 it reverts to the municipality without payment. The electric-lighting plant and undertaking is to remain the property of the company in perpetuity. A company, also British, known as the Costa Rica Markets Co., and formerly called the Costa Eica Markets & Tramway Co., formerly held a concession to operate a tramway system in the city of Cartago. This tramway undertaking was abandoned in 1898, but the company continues to operate markets both in Cartago and Heredia. The market concessions are for 50 years from 1888, at the conclusion of which period they revert to the municipality. The capitalization of this company, authorized and outstanding, consists of £60,000 in shares of £10 each, including £10,000 issued in 1900 to holders of first mortgage bonds, in satisfaction for overdue interest. There are also £44,800 (approximately) 4 per cent (formerly 7 per cent) first mort- gage debentures, redeemable at par or under after surplus after bond interest; £9,700 5 per cent second mortgage debentures due 1916 (pre- sumably extended) ; and £8,400 (original issue £10,000) prior lien 7 per cent debentures. The reduction in the interest rate followed the abandonment of the Cartago tramway, after the earthquake of 1898, and the 4 per cent has been maintained, though with some recent irregularity, on the first mortgage bonds. Interest on the second mortgage bonds was defaulted in 1895 and largely remains unpaid. The interest on the prior lien bonds has been paid regularly and the sinking fund maintained. Profits from the markets have varied dur- ing recent years from £1,895 in 1914-15 to £3,022 in 1913-14. There was a debit balance to profit and loss, inclusive of unpaid interest, on September 15, 1915, of £22,465. First mortgage debentures carry voting power, 10 votes to each £100. AGRICULTURE. The coffee plantation is the one factor around which the economic development of the Republic is built. The size and value .of the coffee crop means relatively as much to Costa Rica as does the grain crop to. Argentina or Russia, and has much to do with the price and stability of the exchange market. The value of coffee exported in 1914 and 1915 was $4,666,368 and $3,732,713, respectively. The coffee is of a very high grade. Formerly the United States pur- chased only a very small amount, but since the war it has taken ever- increasing quantities. The average return on investments in coffee estates covering a period of years is quite large, provided, of course, the management is good. Banana raising as a field for the investment of capital is not generally recommended, for unless the business is handled on a very large scale and the company has other branches of enterprise there is little likelihood of profits being earned. While the produc- tion of bananas in Costa Rica does not directly benefit the country greatly other than through the revenues derived from the export duty, it nevertheless brings a fleet of excellent ships to Port Limon, 406 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. carrying large numbers of tourists who spend very substantial sums of money in the country annually. The cultivation of cacao is increasing and will no doubt in time prove of great importance, especially in the blighted banana lands adjacent to the Northern Eailway of Costa Eica. Costa Eica is coming into prominence as a sugar country, espe- cially the western and central Provinces. Formerly the country imported sugar, but now is exporting it in considerable quantities. The output in 1915 was 5,207 metric tons, as compared with 2.869 tons in 1913. Of the sugar raised during the year, 2,392 tons, valued at $165,620 were exported, of which the United States and Panama took by far the greater portion. There seems no reason why sugar planting on a large scale in this country should not be profitable, as labor is reasonable — far cheaper than in Cuba — and markets are accessible. The United Fruit Co. is by far the largest and most important concern that has invested in Costa Eica. As of September 30, 1917, that company stated the book cost of its properties in the Eepublic to be $12,851,897, a sum larger than that invested in any other of the tropical countries. Lands owned were carried at a book value of $6,855,863, houses and buildings at $738,073, railways at $2,840,268, cultivations at $1,148,627, etc. The acreage improved and unim- proved was as follows: Improved, 38,196 owned and 921 leased; unimproved, 202,304 owned and 4,360 leased; total, 240,500 owned and 5,281 leased. The 39,117 acres under cultivation were devoted to the following crops: 24,914 to bananas, 7,495 to cacao. 652 to coconuts, and 107 to pineapples, the remainder being mostly used for pasturage. A total of 2,737 cattle and 1,650 other animals were owned. MINING ENTERPRISES. The mineral resources of the Pacific slope of Costa Eica are very large. Gold has been mined at intervals since before the Spanish conquest. The value of gold exported in 1915 was $800,294. A small amount of silver (value $6,122) was also exported. Eecently a large manganese field was discovered and numerous claims have been located. This ore body is rather remote from transportation facili- ties. It is of blanket formation. Many other minerals are known to exist, but development awaits the coming of additional railways. The Costa Eican Manganese & Mining Co., of Delaware, is plan- ning to carry on extensive mining operations in this field. Oil has recently been discovered in Costa Eica, apparently in pay- ing quantities. A concession to explore the oil-bearing lands, which are located in San Jose, Guanacaste, and Alajuela, was recently given to an American syndicate (the Sinclair Gulf Corporation). A subsidiary company will be formed to exploit fully the possibili- ties of the field. The principal mineral is gold and the principal mining fields are those of Abangarez, La Union, Aguacate, and Montezuma. The Abangarez Gold Fields of Costa Eica was incorporated in 1899 and acquired various mining properties in the Eepublic, in- cluding those of the Guanacaste Syndicate, the Guacimal Explora- tion Co., and the Costa Eica Esperanza Mining Co. A power plant on the Guacimal Eiver, a mill, an aerial tramway, etc., are owned. CENTRAL AMEEIOA — COSTA EICA. 407 As of May 1, 1915, the company, which is largely controlled by interests identified with the United Fruit Co., entered into an agree- ment with Mr. J. N. Popham by which the latter undertook to operate the property on a basis of 10 per cent of the net profits over and above operating expenses and the cost of current develop- ment work necessary to open up new ore reserves. The capitalization of the company as of December 31, 1916, consisted of $3,880,000 common stock, $1,000,000 preferred stock, 6 per cent cumulative, and two issues of 6 per cent notes, $374,000 and $476,000, respectively, which matured May 1, 1916, and the principal of which had not been paid off to August, 1917. The par value of the shares is $25. About 42 per cent in back dividends on the preferred stock remains due and unpaid. The earnings of the company over a period of years have been as follows : Years. Gross revenues. Net in- come after interest charges. Tons of ore crushed and milled. 1910 $895, 234 982, 586 606, 782 579, 236 198, SS7 197,619 670, 574 +S267, 047 + 188,552 - 175,463 - 22,040 - 174,589 - 87,789 + 165,389 31,317 1911 42,514 191 2 50,011 1913 69,346 1914 _ 1915 37,742 25,262 1916 50, 221 The company had, as of December 31. 1916, $282,519 cash and other current assets. There were $1,333,426 notes, including those overdue and unpaid, and current liabilities to the amount of $158,063. It is stated that during the early months of 1917 the outstanding demand loans have been reduced by $158,000. A total of $98,432 was ex- pended during 1916 for betterments and underground development. Future prospects were said to show promise. The Montezuma mine is under American management and control. It is said to be showing good profits. The mine was discovered before the arrival of Europeans in Costa Rica. Although copper is not mined at present in Costa Rica in com- mercial quantities, it is known to exist, probably in sufficiently large veins to warrant exploitation. The Las Concavas mine, opened cen- turies ago, was a moderate producer for a considerable. period, but at last accounts was idle. Various other outcrops of the ore have been located, and some were mined in a small way before the Spanish conquest. MANUFACTURING. Costa Rica is not a manufacturing country of importance. Coffee- drying establishments, small sugar mills, a liquor distillery (na- tional), and a few tobacco factories are most worthy of notice. There are in addition 8 ice factories, 1 brewery, 29 iron foundries and shops, and 62 steam sawmills. There are in all 4,678 manufacturing and commercial establishments. Of these, 2,692 are under Costa Rican control, 518 owned by Chinese, 438 by Spanish subjects, 254 408 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. by subjects of the British Empire, 168 by Italians, and 105 by citi- zens of the United States. There are doubtless numerous opportuni- ties in this field, especially as the country is certain to attract immi- gration in the not distant future. These opportunities are, however, confined for the present to industrial enterprises not requiring ex- tensive capital. FOREIGN INVESTMENTS IN COSTA RICA. Taken as a whole, Costa Rica might be spoken of as an attractive field for investment. The country, away from the railways, is little developed and in many parts is wonderfully fertile. Great Britain and the United States have the largest investments at stake, Great Britain holding approximately $8,000,000 Government bonds, as well as shares and debentures of the Costa Rica Railway, the Costa Rica Electric Light & Tramway Co., Costa Rica Markets, etc. The United States has invested in the field a sum probably about equal to that which Great Britain has placed there. The principal Ameri- can concern is, of course, the United Fruit Co. There is also con- siderable American capital in mining and other enterprises. Prob- ably our interests have $20,000,000 at stake in the Republic. France owns about $7,000,000 bonds and presumably has some minor invest- ments. Germany is thought to possess about $1,500,000 of the Gov- ernment bonds and has placed sums in the coffee industry. Canada has its banking agency. Presumably most of the other capital has been raised locally. There are few countries in the Americas more advanced and pro- gressive than Costa Rica, and once it is able to obtain additional immigration and more capital for development its future is assured. GUATEMALA. INTRODUCTION. Guatemala, the most northerly of the Central American Republics, is second in a^ea and first in the number of inhabitants among the countries of Central America. Its estimated area is 46,774 square miles and its population, according to a recent estimate, 2,119,165. The Republic borders on the Pacific Ocean, the Caribbean Sea, Mex- ico, Honduras, Salvador, and British Honduras. Its total coast line is 283 miles, and it has three ports of commercial importance, Puerto Barrios and Livingston, on the Caribbean Sea, and San Jose, on the Pacific Ocean. A large portion of the country, particularly the central and western part, are extremely mountainous, a number of the peaks being volcanic. The climate varies from the tropical heat of the coastal lands to the cool, bracing air of the interior highlands. The rainfall, extremely heavy on the coast, lessens as the interior is reached, averaging less than 33 inches per annum at Gxiatemala City. As a field for investment, Guatemala has attracted a fair amount of foreign capital. The Guatemalan Government stated in 1915 that more than 50,000,000 marks of German capital had been invested in coffee plantations, public utilities, banking institutions, etc., while British investments in Government bonds, railway securities, coffee plantations, etc., amounted to possibly $25,000,000 to $30,000,000. The principal American investments are held by or in the interest of the United Pruit Co., the total investments of which were stated to amount to $4,751,288 as of December 31, 1916. Most of the com- mon stock and a portion of the other securities of the International Railways of Central America are also held by interests identified with the United Fruit Co. The total American capital invested probably amounts to $12,000,000. The capital and chief city of the Republic is Guatemala City, its population numbering probably 115,000 to 120,000. There are sev- eral other more or less important cities, among them Coban, Escu- intla, Mazatenango, and Quezaltenango. A large part of the popu- lation of these cities and of the country away from the Caribbean coast is partly or wholly Indian. GOVERNMENT LOANS AND FINANCES. The external debt of Guatemala amounted, at last accounts, to £1,468,060. This represents the outstanding balance of £1,600,000 bonds issued in 1895 to unify the external and internal debts of the Republic, amounting at that time to £890,300 and £964,144, respec- tively. The rate of conversion was £75 of the new bonds for £80 old external bonds and £75 of the new bonds for £100 old internal bonds, with coupons in arrears. A noncumulative sinking fund of £15,000 per annum was to retire the issue, gradually, and an export tax on 409 410 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. coffee was assigned as security for the bonds. The present rate of tax on coffee is $1.50 gold per quintal. For a period of years the Republic experienced difficulty in mak- ing payments of interest on the bonds, but since 1913 payments have been made regularly, despite the falling off in governmental income owing to the war's effects on the customs duties. The financial posi- tion and credit of the Republic have shown considerable improve- ment. The sinking-fund operations are expected to be resumed com- mencing July, 1917, and deferred certificates will, it is expected, be issued to cover all interest payments in arrears. The methods that will be followed in paying off these deferred certificates had not been announced at the time this report was written. Guatemala has made a very creditable showing in handling its finances, and in meet- ing the service on its external loans has usually advanced the neces- sary funds to its representatives abroad two or three months before the date on which due, thus assuring prompt payment. A recent statement placed the internal debt of Guatemala at £186,929. This was largely in the form of contracts due the various banks, including approximately 45,000,000 paper pesos due the Banco de Guatemala and approximately 30,000,000 paper pesos due the Banco de Occidente. Internal bonds outstanding amounted to 3,667,000 paper pesos and interest on bonds in circulation amounted to 7,154,053 paper pesos. The remainder of the internal debt was in the form of obligations due the railways, notes of the bankers' com- mittee, floating debt, etc. Gold liabilities were in the form of $343,178 " Sundry Departments of State," and $584,802 due the Cen- tral Railway (International Railways of Central America). The general estimates of administrative expenditures during the fiscal year July 1, 1917, to June 30, 1918, were 64,780,957 paper pesos, as compared with total expenditures during 1916 amounting to 51,897,633 paper pesos. The principal items in the budget for 1917-18 were: Public credit. 23,139.138 paper pesos; War Depart- ment, 10,310,708 pesos: Education, 7,704,370 pesos; Interior and Jus- tice, 7,048,867 pesos; Finance, 4.770,792 pesos; and Foreign Affairs, 3,845,346 pesos. The highest recorded price since 1911 on the London Stock Ex- change for the Guatemala external 4 per cent bonds was 59^, this comparing with an approximate price of 42 in January, 1918. BANKS. There are several banks of importance in Guatemala; these will be discussed briefly : The American Bank of Guatemala dates from the year 1895, when it was founded with a capitalization of 1,000.000 silver pesos (1 sil- ver peso equal to $0,363 United States gold), the shares having a par value of $1,000 each. Since its incorporation the American Bank has increased its capitalization from time to time: the present total is 4.000,000 silver pesos. alL of the increased capital being issued at a substantial premium. The 4,000 shares are held by more than 400 persons and firms, the average holding being between 5 and 20 shares;_the largest shareholder is the Colombian Bank, with 132 shares in its possession. The reserve funds of the bank are about equal to its capitalization. The annual dividend rate is very large, CENTRAL AMERICA GUATEMALA. 411 frequently reaching 40 per cent. The bank is located at Guatemala City. The Bank of Guatemala was founded early in 1905 by a group of Guatemalan and foreign capitalists and received from the Govern- ment valuable concessions and exemption from taxes. The author- ized capitalization of the bank is 10,000,000 silver pesos, of which 2,500,000 pesos stock is outstanding. The par value of the shares is 1,000 silver pesos each. Not long after the bank began operations the shares were quoted at a premium of 50 per cent, from which point they soon rose to more than twice par. The bank has a reserve and sinking fund equal to more than twice its capitalization. It collects the funds derived from the import tax on general mer- chandise and the export tax on coffee and other products, such as timber, etc. Among its founders was Gen. Barrios, then President of the Republic. The head office of the bank is at Guatemala City ; there is a branch at Escuintla, and there are agencies throughout the Republic. The Occidental (Western) Bank was founded in 1881 and has its - headquarters at Quezaltenango. Its authorized capitalization is 2,000,000 silver pesos, of which approximately 1,650,000 silver pesos is paid in. The bank occupies a strong position, having sub- stantial reserves on hand. In addition to its main office, there is a branch at Guatemala City and agencies at Retalhuleu, San Felipe, Mazatenango, and Cotapeque. The Colombian Bank was founded in 1878 with Colombian capi- tal and by Colombian citizens. The institution holds a small in- terest in the shares of the American Bank of Guatemala. The head office is at Guatemala City. The International Bank of Guatemala is the oldest institution of its kind in the Republic, having been founded in 1877. Its paid-up capitalization is 2,000,000 silver pesos. RAILWAYS. The only important railway system in Guatemala is that oper- ated by the International Railways of Central America, incorpor- ated in 1912 as a consolidation of the Guatemala Central Railway, the Guatemala Railway, the Occidental Railway and the Ocos Rail- way. The company's lines as they now exist extend from Puerto Barrios, the most important Caribbean port of the Republic, to Guatemala City (194 miles), thence to San Jose on the Pacific Ocean (74 miles), with a branch from Santa Maria, through exten- sive coffee districts, to Mazatenango (60 miles) and thence to the Pacific port of Champerico (42 miles). An extension also runs from Las.Cruces to the Mexican frontier (54 miles), and additional mileage is in operation in the Republic of Salvador (see p. 446). The section of the system extending from Puerto Barrios to Guatemala City was projected a number of years ago by the late Rufino Barrios, then President of the Republic. Work on the un- dertaking was begun in 1892, and by the end of 1894 the line had been constructed from the coast to El Rancho, 129 miles. At this point the Government, owing to lack of funds, was compelled to sus- pend construction and the property was leased to a private company. Business did not come up to expectations, and the company, in order 412 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. to meet operating expenses, had to run the road without making any charges for maintenance expenses. The result was that the en- tire line was allowed to fall into a deplorable state of disrepair, causing the operation of trains to be practically suspended. A slow passenger-and-mail train was run about once a week in each direc- tion, provided the track was not partly washed away or bridges down. In the year 1902 plans were laid to reconstruct the line and to continue it to Guatemala City. The building of the new mileage required some heavy engineering, the country traversed being ex- tremely mountainous. This section of the line abounds in wide curves, cuts, and fills, and there are a number of tunnels. The first train was run from the Caribbean coast to the capital in 1908. The International Railways of Central America is now oper- ated in four divisions, as follows: Divisions. Mileage. Gross earnings. Operating expenses. 1915 1916 1915 1916 195 139 12 99 11,293,314 742,369 44,373 123,882 $1,446,151 981,115 9,188 139,166 $607,038 470,776 36,061 112,288 $589,469 450,863 Total 445 2,203,938 2,575,620 1,226,163 In 1915 the net revenues from operations were $977,775 ; the total net income after taxes had been deducted and other income added (operating income) was $1,013,140; interest, discount, etc., amounted to $596,471; and the net income (surplus) was $416,669. In 1916 the net revenues from operations were $1,389,801 ; the total net income after taxes had been deducted and other income added (operating income) was $1,418,913; interest, discount, etc., amounted to $587,700; and the net income (surplus) was $831,213. Including the operations of the Occidental Railway (50 miles) and the Pan American Extension from Las Cruces (41 miles), gross re- ceipts in 1916 totaled $2,825,295 and in 1915 $2,406,087. The total mileage completed by the International Railways of Central America, as of December 31, 1916, was 592, as compared with 588 miles as of December 31, 1915; the mileage under construction at the beginning of 1917 was 31 ; and the mileage still to be built was 277. The unconstructed mileage is to be located 55 miles in Guate- mala, 134 miles in Salvador, and 88 miles in Honduras. The total capitalization of the company consists of $30,000,000 common stock, $10,000,000 5 per cent preferred stock, and $10,506,666 bonds. The preferred stock is cumulative and received dividends at the rate of 5 per cent per annum from August, 1912, to August, 1915 inclusive. In the event of the common stock receiving more than 5 per cent in any year, the preferred stock is entitled to a similar dividend. No dividends have as yet been paid on the common stock. The bond issues consist of $2,379,000 6 per cent bonds of the Guate- mala Central Railway (due 1931), £1,000,000 first mortgage 5 per cent (due 1972), and $3,621,000 secured by a first mortgage on 104 miles and by a second mortgage on the remainder of the mileage. CENTRAL AMERICA GUATEMALA. 413 The Southern Pacific Co. owns $1,788,000 of the Guatemala Central 6 per cent bonds. Quotations for the company's securities follow: Price Securities. %"™ January, 1918. Common stock 23 10 Preferred stock 72 51 First mortgage 5 per cent bonds 87 70 The stocks of the company are listed on the London Stock Ex- change and in New Orleans. . It is presumed that eventually the system will be carried through Nicaragua, Costa Rica, and Panama, giving an all-rail route between the United States, Mexico, Guatemala, Salvador, Honduras, Nica- ragua, Costa Rica, Panama, and the Canal Zone. The International Railways of Central America owned, as of De- cember 31, 1916, 7,500 shares of the common stock and 190 shares of the preferred stock of the Guatemala Tramway, Light & Power Co., the shares being carried at a cost valuation of $14,000. As of the same date the railway company had advanced to the public-utility company $231,166. In addition, the railway company owned, as of the- above-mentioned date, $77,160 shares of the Guatemala Marble & Granite Co. The United Fruit Co., as of September 30, 1917, operated 92 miles of railway in the Republic of Guatemala, as compared with 52 miles operated in 1915. The company also operated 147 miles of tramways, as compared with 151 miles in 1915. Locomotives in service were 10 in number, and 35 cars were in use on the railways and 370 on the tramways.' The cost of railway lines in Guatemala owned by the United Fruit Co., as of September 30, 1916, totaled $1,007,778 and of tramways $237,512. While these lines are built primarily to handle the banana trade of the company, they nevertheless do a limited business as common carriers. Guatemala is a rich country, and further development along rail- way lines is sure to take place in the not distant future. A line is destined at some future date to enter the Department of Peten, running from British Honduras. This line will have its Guatemalan terminus at Flores, on Lake San Andres de Peten, and will extend through the finest hardwood district in Central America. It will cross the boundary at Carbutts Falls and will reach the Caribbean Sea at the port of Belize. Peten is the largest in area among the De- partments of Guatemala, despite which fact its population is the smallest, not exceeding (at most) 8,000. The Verapaz Railway is a 29-mile line, extending from Panzos to Panacajche, and was completed in the year 1898. Panzos is a city on the banks of the River Polochic, and is in steamship com- munication with the port of Livingston, on the Caribbean Sea (weekly service is maintained). The railway is an outlet for a large section of the important Department of Alta Verapaz, which pro- duces coffee in large quantities, as well as cacao, sarsaparilla, va- 414 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. nilla, cotton, etc. This section of the Republic is rich also in all classes of lumber and, in the years before the European war, ex- ported large quantities of valuable orchids and rare plants. The present railway mileage of Guatemala is approximately 575, not including the tramways operated by the United Fruit Co., the Urban (horse) Railway, and light railways to coffee plantations. PUBLIC UTILITIES. Public-utility development in Guatemala has made moderate progress. The cities, except Guatemala City, are comparatively small and consequently their needs are more or less limited. The capital is the only city possessing tramways or likely to develop sufficient traffic to support them. The system in Guatemala City is operated by mule service, although plans have been laid to mod- ernize the line by electrifying it. During 1915 the Urban Street Railway of Guatemala City carried 2,984,950 passengers; 9.24 miles of lines are operated. There is also an interurban system operated by steam. The International Railways of Central America owns 7,500 com- mon and 190 preferred shares of the Guatemala Tramway, Light & Power Co., carried at a valuation of $14,000. The railway company has advanced to the public-utility company the sum of $231,166. German capital is invested in the electric lighting system of Guatemala City. Guatemala City receives its water supply from the aqueducts of Pinula and Mixco and the Rivers Acatan and Minas. The aque- duct of Pinula runs north and south, a distance of about 6 miles, and is well constructed ; the water from Mixco is brought to the city by means of a masonry conduit about 9 miles in length, and it runs through two hills by means of tunnels. The daily capacity of these two sources of supply is about 1,325,000 gallons. The River Acatan has its source to the southwest of the city and its supply is somewhat more than one-half of that furnished by Pinula and Mixco. The water from the Minas River is obtained by means of a 15-mile pipe line, the construction of which was financed by the International Bank of Guatemala, the supply amounting to about 600,000 gallons daily. The water supply of the city remains insufficient, despite the efforts made to increase it, and plans have been considered for the laying out of a new and comprehensive system to cost $1,500,000 or more. The source of this supply would probably be the River Teocinte, and the distance required to carry the water to the city would be about 20 miles. Some engineering difficulties would be en- countered. Plans have also been considered for the laying out of a new and enlarged sewerage system for the city, the estimated cost of this undertaking to be approximately $1,000,000. Other cities and towns in Guatemala have water-supply systems and there are electric lighting plants and services in San Jose, Momestenango (population said to be 25,000), Huehuetenango (the Huehuetenango Electric Co.), Quezaltenango, Totonicapan (munici- pally owned service inaugurated in 1911), San Marcos (population 5,000), Puerto Barrios, and several other towns and cities. There are also telegraph and telephone services, the latter in operation in CENXKAL AMERICA GUATEMALA. 415 Guatemala City and in a number of smaller cities and towns. The telephone systems were constructed as private enterprises, while the telegraph lines are mostly under State control. Upward of 1,000,000 private telegrams are handled annually. MINING ENTERPRISES. Guatemala possesses a considerable amount of mineral wealth, despite which fact, however, but little actual mining is being carried on. The extremely rugged nature of the country and the lack of railways and roads account for this lack of development. There were small copper mines in Guatemala during the colonial period, and work was carried on at as early a date as the seventeenth century. Small copper veins have been located in the western part of the Department of Baja Verapaz, near the towns of Eabinal and Cubulco. This is about in the center of the Republic. In the De- partment of Chiquimula, near the boundary with Honduras and Sal- vador, have been located copper deposits said to average from 5 to 20 per cent copper. These deposits are not worked, but will be available in the event of the construction of the projected and partly surveyed railway to extend from Zacapa, on the main line of the International Railways of Central America, to Santa Aha, Salvador. Other copper deposits are known to exist in this now isolated De- partment. In the Department of Huehuetenango, on the northwest- ern frontier, copper has also been located. The find was made near Chiantla, where there are also silver-lead mines. Chiantla is located just north of Huehuetenango, the capital of the Department. No railway lines are near at hand, and communication with the outside world is somewhat difficult. In this Department silver-lead mining has been carried on since the early colonial period, although at the present time operations are on a very small scale. Approximately 70 years ago a company controlled in England and France acquired rich mining properties in the Department of Chi- quimula and carried out extensive operations, obtaining nearly 50,000,000 ounces of silver, before the supply of the marketable grade of the mineral was exhausted. During the period of its greatest prosperity, the mine is said to have been the greatest silver producer in, Central America. This distinction is held at present by the New York & Honduras Rosario Mining Co., of Honduras. A considerable amount of placer gold mining is being carried on, mostly by individuals. The largest and most important gold placer property is the " Las Quebradas Gold Mines," situated some 30 miles from Puerto Barrios, on the Caribbean coast. The mines are located on the Bobos River, in the foothills of the Merendon Mountains, at an altitude of about 700 feet. The near-by town of Las Quebradas consists almost wholly of the workpeople and their families, having a population of about 250. The property is about 8 miles from Morales, on the Puerto Barrios-Guatemala City section of the Inter- national Railways of Central America, and is practically connected by a spur of one of the United Fruit Co.'s banana lines. The area of this property is about 2,000 acres, and the charter is in perpetuity. The average return per cubic meter varies from 25 to 50 cents. Ex- cellent water power is obtainable from the falls of the Bobos River, 416 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. three miles above the mining property. For a long time the mines were the property of an American firm, Potts & Knight, but it is un- derstood that negotiations were under way a short time ago whereby a syndicate would take over the property and develop it on an even more extensive scale than hitherto. The total number of mines that have been declared or registered is approximately 135. Of this total probably not more than half a dozen are worked. The mining laws of the Republic are extremely liberal, a concession being necessary only in the event that machinery is to be installed. A mining claim covers approximately 25 acres of surface and allows the holder to mine as far beneath the surface as desired. There are evidences that a substantial amount of petroleum exists in the Republic. The Government has decreed itself in exclusive control of the oil deposits, although privileges will be granted whereby private interests will be able to lease oil lands over a term of years. OPPORTUNITIES IN THE DEPARTMENT OF PETEN. The Department of Peten, which comprises the most northerly section of Guatemala, has an area of about 39,500 square kilometers (15,250 square miles), equal to about one-third the total area of the Republic. Its population hardly exceeds 8,000 and it has not been wholly explored. The Department is known to be one of the greatest sources of undeveloped forest wealth in Central America. In the north of the Department are vast areas of campeche, a very valuable dye- wood, the existing supply being almost unlimited. Its exploita- tion, which has thus far been hardly attempted, will some day prove a source of great revenue to those willing to undergo the hardships inevitable in such a district. In this section of Peten there also exist a very large number of " chicozapote " trees, from whose sap the chicle of commerce is made. These trees -grow to a large size and form dense forests, facilitating their exploitation. A consider- able amount of this gum is extracted annually, but the supply is still far from being exhausted. Henequen, to-day the chief source of wealth of the Yucatan sec- tion of Mexico, is destined in the not distant future to be cultivated and produced in very large quantities in this section. Practically no henequen is being exported from Peten at the present time. The profile of the northern district is generally level and in some sec- tions swampy. The climate is generally more or less torrid and in some parts rather unhealthful. The eastern section of Peten, bounded by British Honduras, is extremely rich in forest products — mahogany, cedar, caracolillo (a tree similar to mahogany), a wide variety of cabinet woods, rubber, chicle, sarsaparilla, and numerous dye, tanning, and medicinal trees. The climate in this district is torrid, the rainfall heavy, and the population sparse. It is through this section that a railway starting from Belize, British Honduras, is likely some day to find its way. It has been pointed out that this railway would develop in the course of time a very large traffic in forest products and would prove the eventual means of developing the Department. CENTRAL AMERICA GUATEMALA. 417 The Meridional Region, or mountain district, is far more temper- ate in climate, because of the generally higher level of the country .- This region is largely covered with immense forests of hardwood, dyewood, and other kinds of trees. There are several important rivers in this district, some of them being navigable during the rainy season. In the central section are located Flores, San Andres, San Benito, La Libertad, San Jose, and most of the other small cities and towns of the Department. Timber is not so plentiful here, the country being covered with long grasses of considerable value for grazing purposes; it might also be important as an agricultural center, since coffee, heneqnen, sugar, and all kinds of cereals grow readily. There are no navigable rivers in this section, the principal body of water being Lago San Andres; on an island in this lake is Flores, the capital of the Department. There are also a number of smay lagoons. The western section of the Department comprises the basin of the Usamacinta River, one of the. largest and most copious streams in Central America. The region is largely covered with forests, although there are some parts of it highly suitable for cattle grazing. The entire Department of Peten exported, during 1913, 387,837 pounds of chicle, valued at $142,108 United States currency; 186,626 tons of hardwood, valued at $167,000; about 27,000 pounds of rubber, and a' very small amount of other products. Although many thousands of cattle might be maintained in the Department, if it were within reach of the world's markets, to-day only about 2,000 animals are to be found. As previously stated, the entire future of the Department, which bids fair to become in time the chief source of wealth of the Republic, is dependent upon the establish- ment of means of communication with the outside world. The fine hardwood trees, being sinkable, are obtainable at the present time only -at great cost and with considerable difficulty. Labor is also scarce, as is evidenced by the small population. The Department's resources will not always remain undeveloped and therefore are worthy of more than passing notice. Opportunities will present themselves for the establishment of sawmills and lumber mills and for the general development of the forest products, and the com- parative nearness of the territory to the Un'ited States will insure transportation at moderate cost. FOREST RESOURCES. The forest wealth of the Department of Peten has been discussed at length in the several preceding paragraphs. The timber areas of the Republic are by no means confined to Peten but are distributed far and wide. The entire lumber and hardwood industry is merely in its infancy, and development will of necessity be slow. Transporta- tion means are extremely limited in most of the forest-covered dis- tricts, and the methods followed in cutting and sawing the timber are not always the most modern. 63018°— 18 27 418 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. STOCK RAISING. Guatemala contains vast areas of good cattle-grazing lands and there is every reason to believe that the cattle industry will in time become important. Increasing attention is being given to the intro- duction of blooded stock. Refrigeration plants are being" established and everything connected with cattle raising is being carried on in a more modern way. The number of cattle in, the Eepublic at the beginning of 1914 was estimated at 556,843; the total to-day is probably 650,000. In 1914 there were, in addition to the cattle, about 64,000 horsey 515,000 sheep, 33,000 mules, 190.000. hogs, and 11,000 goats. The Government has not heretofore encouraged the exporta- tion of cattle, although there has been a good business in hides. In the past most of the cattle raising in the more northerly Depart- ments has been carried on along the lines followed in bygone days in the United States and at present on the plains of Western and South Australia, the cattle being allowed to range freely over open and unfenced areas. AGRICULTURAL PRODUCTS. Coffee is the principal product of Guatemala and normally forms more than five-sixths of the nation's exports. A very large part of the Pacific slope and two or three of the Departments on the Atlantic side of the Republic are mainly given up to coffee planta- tions. According to a statement of United States Consul Lupton, there were, at the close of 1913; 2,079 coffee plantations, owned as follows : Nationality. Num- ber of planta- tions. Produc- tion in quintals or 101 pounds. Nationality. Num- ber of planta- tions. Produc- tion in quintals of 101 poinds. Nationality. Num- ber of planta- tions. Produc- tion in quintals of 101 pounds. Guatemalan German 1,657 170 4 9 7 2 1 2 525,356 358,353 630 5,018 1,265 1,008 15 57,402 Spanish 84 21 7 19 20 29 5 16 12,651 1,119 6,508 15,380 12,046 700 140 19,285 Salvadorean 11 9 6 2,255 14 185 Austrian Belgian Hondurau Mixed corn- 12 920 English Nicaraguan, Costa Rican Chinese Chilean 2,079 1,046,236 There is in the Republic a Banco Agricola Hipotecario, with head offices at Guatemala City. This Mortgage Bank makes loans on coffee plantations, and the banks in general make advances on coffee crops. The total coffee production of Guatemala for the year 1913 was 1,177,298 quintals, of which 875,337 quintals was exported. The indications are that the coffee industry for many years to come will occupy first place among the various industries of the Republic. The United Fruit Co. has for some years occupied the most im- portant place in the banana industry. A large part of eastern Gua- temala is suitable for the growth of the fruit. The United Fruit Co. owns in this part of the Republic 25,549 acres of improved and 114,444 acres of unimproved land and leases 1,773 acres of improved CENTRAL AMERICA GUATEMALA. 419 and 65,619 acres of unimproved land. Of the improved land, 25,841 acres are cultivated for bananas. The total value of the United Fruit Co.'s properties in Guatemala was stated, as of September 30, 1916, to amount to $4,751,288, as compared with $4,949,041 in 1915. The company, occupying by far the most important position among the banana producers of Guatemala and other parts of Central America, is able to produce at a very much lower cost than inde- pendent growers. There are, however, a number of independent plantations, the production of a number of these being sold to the United Fruit Co. The sugar industry in Guatemala is likely in time to become of considerable importance. Exports of various grades of the prod- uct are increasing, and there is plenty of land available for the rais- ing of much larger crops. A few small mills and refineries exist. Before the war a very large part of the sugar was shipped to the markets of Europe, this sugar being mostly of a somewhat low grade. There is plenty of opportunity for the introduction of more up-to-date methods and more modern machinery. Many varieties of cereal crops grow readily in Guatemala. INDUSTRIAL AND MANUFACTURING ACTIVITIES. It is hardly necessary to say that progress along industrial and manufacturing lines has been decidedly slow. Primarily agricul- turists, the inhabitants have been slow to take up manufacturing, although progress along certain lines has been noted. There are a few sugar mills and refineries, several small tanneries, and a shoe factory operated by steam power ; this last factory also makes envel- opes and stationery as a side line. Two fair-sized breweries have been established, one in Guatemala City and the other in Quezalte- nango, the former being locally owned. A number of cabinet works, tobacco, soap, candle, mineral and soda water, and other factories are found. The Cantel Cotton Mills at Quezaltenango do a very sub- stantial business, the company manufacturing a variety of cotton goods and thread. This company raises part of the cotton it uses, but buys by far the larger share from the United States. PRESENT OUTLOOK. In conclusion the writer desires to quote from " Central America as an Export Field," by Garrard Harris, special agent of the Bureau of Foreign and Domestic Commerce : It is evident that the time is ripe for investment in Guatemala. At the close of hostilities in Europe loans will be called on many of the coffee and sugar properties. It is likely that many of these will be sold at very low prices. There will be a general demand for money — at high interest— with which to liquidate European indebtedness. The country is in good condition. The laws are liberal and well adminis- tered, and the nation has made great progress in the last 15 years. Of tins progress the people, who are very patriotic, are justly proud. HONDURAS. INTRODUCTION. Honduras, with an area slightly in excess of 45.000 square miles and a population of approximately 600,000, is bounded by the Re- publics of Guatemala, Salvador, and Nicaragua and by the Carib- bean Sea and the Pacific Ocean (Gulf of Fonseca). The Republic has been somewhat backward in its development, a fact largely accounted for by the almost absolute lack of internal communication. Through the central portions of the country noth- ing but the roughest trails exist, the pack mule being practically the only freight carrier. Tegucigalpa, the capital (population about 28,000) , is without rail communication of any kind, the trip from that city to Puerto Cortes, the only accessible Caribbean port, taking up- ward of two weeks, with hardly a hotel available en route. The city is readily accessible only via the port of Amapala on the Gulf of Fonseca. Such foreign investments as have been made in Honduras during recent years have, in general, turned out quite well; most of the invested capital has been utilized in the development of banana plantations and for mining purposes. GOVERNMENT LOANS AND FINANCES. The Republic of Honduras is to-day shouldering a national debt far beyond its resources, interest on which is neither earned nor paid. The responsibility for this debt can not be placed on those who have ruled the country's destiny during the present day and generation, but was forced on the nation largely through circumstances beyond its control. The financial condition of Honduras is the result of the attempted construction of an " Interoceanic " railway from Puerto Cortes on the Caribbean Sea to Amapala Bay on the Pacific Coast. The scheme had its origin shortly after the discovery of gold in California, and at about the date of the construction of the Panama Railroad. It was largely the idea of Mr. E. G. Squire, still famous for his books on Latin America. Mr. Squire formed a company to carry out the enterprise, but met with great opposition on the part of the owners of the Panama Railroad. Finally in 1858 some survey work was done under the direction of Gen. William W. Wright, an Ameri- can, the cost being approximately $400,000. The length of the line as located was to have been about 250 miles. The outbreak of the Civil War in the United States, however, brought about the col- lapse of the company and ended Mr. Squire's connection with the enterprise. In the year 1867 the Government of Honduras, following extended negotiations with certain contractors, gave a concession for the con- 420 CENTRAL AMERICA HONDURAS. 421 struction of the railway, issuing £1,000,000 10 per cent bonds, which were offered publicly in England and on the Continent of Europe by Messrs. Bischoffsheim & Goldschmidt at 80 per cent. The Govern- ment agreed to provide an annuity of £140,000 during the years 1870 to 1884, inclusive, also promising the subscribers one-half of the rail- way profits for the years 1885 to 1899, inclusive. Prior to the marketing of the above bond issue, the debt of the Republic was £90,000, representing a loan dated 1867, bearing inter- est at 5 per cent per annum. These bonds had been issued largely to liquidate this Republic's share of the debt of the former Central American Federation dissolved in 1822. Certain floating obligations of the nation were also provided for by the loan, thus clearing up all of the unpaid principal and interest on debts previously contracted. In 1869 Messrs. Dreyfus & Co., of Paris, sold for the account of Honduras £2,490,108 bonds, bearing interest at the rate of 6§ per cent. These bonds, which were publicly offered at 75 per cent, were, like the bond issue of 1869, brought out to provide funds for the construc- tion of the railway, and were secured on the railway property and on the nation's forest domains. Seventeen years was to have been the life of the issue, the bonds being retirable through a sinking fund. Finding that the European investing public was in the mood for the purchase of Government bonds yielding fabulous returns, the contractors prevailed upon Honduran authorities to authorize an- other' loan, this time for the sum of £2,500,000. The bonds were offered in London (year 1870) at 80 per cent and bore interest at 10 per cent. As an additional attraction it "was agreed that the bonds would be paid off at par in 34 semiannual drawings. The designated security for the loan was the railway, its revenues, and the produce of State Domain. Messrs. Bischoffsheim & Goldschmidt were the bankers, acting for the account of Mr. C. J. Lef evre. Early in the year 1873 the interest on the various loans, which until that time had been paid out of principal, was defaulted. A total of 57 miles of the line had been completed at a cost of probably not more than $1,500,000. To cover the cost of the construction of this mileage a debt of £5,990,108 had been contracted. Sinking-fund operations had reduced the total to £5,398,570. No interest has since been paid on these bonds or on the £90,000 bonds of 1867, and the total debt, with interest accrued to January, 1917, amounts to ap- proximately £26,000,000.- To tell the story of the numerous attempts that have been made by both Government and bondholders to effect a settlement of this debt would require a volume. The railway remained in. an uncompleted state and was allowed to fall into a deplorable condition. A bridge that had been swung across the Chamelicon River collapsed, render- ing about 20 miles of road useless. About a dozen years elapsed before this bridge was replaced, and it was not until several years ago that the line was put in fair order. Recently a short extension was completed, carrying the line a few miles farther into the interior. While admittedly this railway will no longer be of great value as an " interoceanic " route, it is stated that sufficient local and export business could be developed to assure the success of the extension across the Republic. Access would be provided to various cattle lands, 422 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. to the mineral wealth of the country, and to the centers of popula- tion. There is no question that Honduras has vast undeveloped re- sources. The 10 per cent bonds of 1867 and 1870 are quoted on the London Stock Exchange at about 5 per cent. According to statistics of the Government, the public debt of Honduras, other than the old railway loans, amounted, as of Janu- ary 1, 1916, to 4,165,475 pesos (1 peso=$6.3537 United States cur- rency at normal exchange). This figure compares with 4,877,894 pesos as of June 30, 1914, a decrease of 712,419 pesos, and with 5,747,743 pesos in 1913. At the First Pan American Financial Conference held in Wash- ington May 24 to 29, 1915, suggestions were made on behalf of the Government of Honduras looking toward the settlement of the rail- way loans. Certain export duties, it was proposed, would be in- creased, and other methods adopted to augment the present small na- tional revenue of the Eepublic. Thus far no arrangements have been made along the lines suggested. The financial condition of the Republic is, however, steadily improving, and hopes are entertained for a satisfactory solution of its problems. None of the Departments or municipalities have, so far as is known, any bonds outstanding in the hands of the public. Such improve- ments as have been carried out have generally been financed by the National Government. Direct taxation on property is not usu- ally resorted to as a means of raising revenues, and the financial systems in use throughout the Eepublic are wholly different from those of the United States. A few of the municipalities are supposed to have small floating debts, mostly due the Government. BANKS. There are three banks of issue in Honduras, the Banco de Hondu- - ras, Banco de Atlantida, and Banco de Comercio. The first-named- bank has its headquarters in Tegucigalpa and is. said to have a cap- italization of 417,500 pesos and bank notes outstanding to the amount of 505,000 pesos. The Banco de Atlantida is located at Ceiba and is the principal banking institution for the banana planters and the merchants of that locality. Its capitalization is $250,000 United States currency ($500,000 authorized), and it has notes in circula- tion to the amount of 236,000 pesos. The Banco de Comercio is located at Tegucigalpa; its capitalization is 500,000 pesos and its note circulation 44,000 pesos. These banks may issue paper to the amount of 200 per cent of their outstanding stock, subjeet to a silver reserve or deposit of 50 per cent. Banking laws are practically non- existent, the National Commercial Code governing banking opera- tions. Mortgages and short-time loans normally carry interest at the rates of 10 to 12 per cent and form a large part of the business of these banks. In addition to the three banks of issue there are several private banking and importing firms doing a general business of this char- acter. Exchange is subject at times to very wide fluctuations. The country is on a silver basis, and American as well as local coins' circulate freely. CENTRAL AMERICA HONDURAS. 423 RAILWAYS. Railway expansion in Honduras has been extremely slow. In the year 1916 the total length of all lines in operation was approximately 517 kilometers (321 miles). All the railway mileage in operation is located on the Caribbean side of the Republic; most of it was built primarily for the banana and timber trades and only secondar- ily for the purpose of handling public traffic. The National Railway of Honduras although only about 88 kilo- meters (55 miles) in length, is probably entitled to rank as the most important railway in the Republic. The line has its terminus at the Caribbean port of Puerto Cortes and runs via San Pedro Sula inland for a short distance. The railway is the uncompleted section of thtf Interoceanic Railway of Honduras which was to have crossed the country to the Pacific Ocean. The project was first given pub- licity in 1850, following the gold rush to California, was surveyed in 1858, and turned over by its promoters to the Honduran Govern- ment a few years later. The development of the enterprise brought about the bankruptcy of the Republic and saddled it with a debt far beyond its possible resources (see " Government loans and finances," p. 420). At the close of 1915 the valuation of the National Railway of Honduras was stated as 3,193,176 pesos (peso=$0.3841). The gross receipts for the railway during that year totaled 429,126 pesos. In 1913-14 gross receipts totaled 280,346 pesos. The line of railway operated by the banana-exporting firm of Vaccaro Bros. & Co. runs from 'the port of La Ceiba to San Juan and to various points in the interior, approximately 150 kilometers (93 miles). Yoro, the capital of the State of Yoro, is said to be the ultimate destination of the railway. The Tela Railroad operates approximately 150 kilometers (93 miles) of line, including 37 kilometers (23 miles) of main track and 113 (70 miles) of branches. At the beginning of 1916 about 22 kilo- meters (14 miles) of additional roadway had been graded. The company owns a wharf at Tela, 606 meters (1,988 feet) long and 14 meters (46 feet) wide, fitted to accommodate large steamers. This is said to be one of the best-equipped wharves in Central America. In 1915 the Tela Railroad carried 840,000 bunches of bananas, 14,- 134 tons of general freight, and 1,362 passengers. The equipment consists of 8 locomotives, 7 gasoline trolleys, 3 passenger cars, 1 baggage and mail car, and 122 freight cars. About 96 kilometers (60 miles) of telephone line are operated and a number of buildings owned. The valuation of the property has been placed at $3,000,000. It is said that upward of 4,500,000 bunches of bananas will be pro- duced by the company annually. The Trujillo Railroad is approximately 41 kilometers (25 miles) in length, and the output of bananas along the line is expected to reach 10,000,000 to 12,000,000 per annum. Plans call for the con- struction of large additional mileage. The railway terminates at the port of Trujillo. The Cuyamel Fruit Co., which is said to have invested about $2,- 000,000 in its enterprises, operates about 44 kilometers (27 miles) of 424 INVESTMENTS IN LATIN AMEfcICA AND BKITISH WEST INDIES. line. Other short lines in northern Honduras are operated by the Tropical Timber Co. (7 miles), the United Fruit Co., etc. The United Fruit Co., as of September 30, 1'916, had invested the sum of $3,777,408 in its railway enterprises in Honduras and $9,730 in the construction of tramways to fruit plantations. The mileage owned or in operation under control of the United Fruit Co., amounted, as of September 30, 1916, to 183 miles. In addition, 9 miles of tramway lines were in operation. A total of 24 locomotives, 372 railway cars, and 27 tramway cars were in use. The United Fruit Co. lines were practically devoted to the company's fruit traffic. The International Railways of Central America have surveyed a line across the Pacific slope of Honduras, to extend from the termi- nus of the Salvador Division of the railway to the boundary with Nicaragua. The line, if constructed, will open up for development the Departments of Valle and Choluteca. It is presumed that the International system will eventually be carried through to Costa Rica and Panama. The Honduras section of the system is to be approximately 88 miles in length. A number of railways to develop the resources of the interior have been projected. One of these lines, it is expected, will eventually be carried as far as Juticalpa and possibly to Tegucigalpa, the Re- public's isolated capital. Important interests are said to be finan- cially interested in this project. The railways of Honduras burn coal as fuel, but some of the lines, at latest accounts, were contemplating changing to oil owing to the present high price and scarcity of the coal. Operation by electricity generated from the readily available water power has been advo- cated, but, because of the small amount of available traffic, this would hardly warrant the expense. A project being carried out by an American company calls for the construction of an automobile road from the inland terminus of the National Railway of Honduras to the shore of Lake Yojoa, 30 miles, and the building of a steamer for operations on the lake, which steamer will handle traffic from end to end of the lake, 30 miles, and will connect with a proposed automobile road to Tegucigalpa, the capital. Plans have been laid for the conversion of the automobile highway into a railway. The completion of the undertaking will shorten the route from the Caribbean Sea to the capital from seven days to a day and a half, or less. It is expected that the devel- opment of this enterprise will deflect to this route a large amount of the traffic destined to Tegucigalpa and other interior points. Under conditions previously existing freight was not booked by the Caribbean-Puerto Cortes route, but was sent via the Panama Canal and the Pacific port of Amapala. An American company operates a line of small steamboats on the Ulua River, running from Progreso to connect with the Tela Rail- road for the port of Tela. PUBLIC UTILITIES. There are at the present time no street-railway systems in Hon- duras and presumably no gas enterprises. Electric lights have been CENTRAL AMERICA — HONDURAS. 425 installed in Tegucigalpa, the capital, Cuyamel, Ceiba, and San Pedro Sula, and possibly in one or two of the smaller towns. Several addi- tional lighting properties are projected. The electric light and power enterprise that operates in Tegucigalpa and its environs has three plants located at Centro, Leona, and Rio Chiquito. Gross receipts for the year 1915 totaled 53,734 pesos and operating expenses 51,579 pesos. The telegraph and telephone service of Honduras, as of December 31, 1915, totaled 7,829 kilometers (4,865 miles), an increase of 631 kilometers (392 miles) as compared with December 31, 1914. The service covers the most important centers of the Republic. Opportunities will present themselves, as the country progresses, for the establishment of water, sewerage, electric lighting and power systems, and other public works. Tegucigalpa and its port, Amapala, are at present connected by- a service of passenger and freight auto- mobiles, which service wili doubtless be extended following the con- struction of additional roads. The company operating this auto- mobile line is said to earn a substantial profit. . MINING ENTERPRISES. Minerals are known to exist in almost every Department in the Re- public. In the days of the Spanish Conquest a large amount of gold and silver was mined and Honduras was considered one of the treas- ure houses of the Empire. It is said :hat in one year (1594) $7,500,000 in. gold and silver was taken from the Santa Lucia mines, near Teguci- galpa. This statement may or may not have been true, inasmuch as many exaggerated stories are told concerning the fabulous sums real- ized from the mines during the Spanish days ; but it is known that the sixteenth and seventeenth centuries witnessed the production of very large quantities of minerals in Honduras and the other Central American States. Despite the fact that numerous mining claims are held during the present era, and that attempts have been made to develop many of these-claims, there is only one important mining property being oper- ated at the present time. This is the New York & Honduras Rosario Mining Co. s mine at San Juancito. This long-established American company has been highly successful, and its record of silver produc- tion is probably the best for any silver mine in Central America dur- ing modern times. In addition to its Rosario properties at San Juan- cito the company has been experimenting with various prospecting concessions at Chile Mountain, Guasucaran, Department of Teguci- galpa, and Santa Rosa de Potosi, Department of Choluteca. The Chile Mountain concession, located about 20 miles east of San Juan- cito, was prospected during 1916, but without sufficient encouraging results to make further investigation desirable. Development work was also carried forward in the Guasucaran and Santa Rosa de Potosi properties, but the possibilities of the properties had not been deter- mined at the close of 1916. The following table showing production and dividend record is interesting: 426 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Years. Value of bullion production. Dividends paid. Numbers. Amount. Per cent. 1882 $2,452 12,900 149, 741 244, 445 224, 158 613,446 767,632 590,190 113 369,587 614,499 492,535 392, 486 158, 164 449,526 568,872 611,468 798,995 827,443 780, 760 490, 273 436,818 721,375 993,065 1,112,172 791, 348 788,910 636,500 890, 700 887, 170 944, 213 1,051,273 328, 100 1, 239, 877 1, 191, 761 1,553,115 1883... 1884... 1885 1886 •... 1887 1 2 to 5 6 to 14 $37, 500 60,000 150, 000 2i 4 1888 : 1889 . . . 10 1890 1891 15 to 16 17 to 21 22 to 25 26 30,000 165,000 150,000 37,500 2 1892 11 1893 1894 2i 1895 1896 27 to 28 29 to 40 41 to 48 49 to 60 61 to 75 76 to 73 94 to 100 101 102 to 108 109 to 121 122 to 139 140 to 153 154 to 165 166 to 173 174 to 180 181 to 182 183 30,000 180,000 120,000 180,000 225,000 300,000 105,000 15,000 105,000 180,000 285,000 210,000 180,000 120,000 105, 000 90,000 30,000 1897 : 1898 1899 1900 1901 1902 ' 1903 1904 ' . . 1905 1906 1907 1908 12 1909 (10 months) 1910 7 6 1} 1911 1912 1912-13 (12 months) 1913 (last 3 months) 184 to 188 189 to 193 194 to 197 198 to 205 220,000 240, 000 240,000 400,000 11 12 12 20 1914 1915 1916 Total 22,726,082 4,190,000 N °TE-— Dividends 1 10 182 < inclusive, on capital stock of $1,500,000; dividends 183 to 205, inclusive on capital stock of $2,000 000 Dividend payments for the calendar year 1917 totaled $400,000 or 20 per cent on the $2,000,000 stock outstanding. Profits for 1916 totaled $596,093 and after reserves $460,110. The ore reserves of the New York & Honduras Eosario Mining Co., as of December 31, 1916, were estimated at 312,143 tons, valued at $2,970,698 United States currency, or $49.51 per ton, this com- paring with ore reserves of $3,353,098 (343,716 tons) on December 31, 1915, and with $4,380,446 (418,978 tons) at the close of 1914. The per-ton value of the ore in 1915 and 1914 was stated to have been $9.76 and $10.75. The company has excellent water power avail- able and its plant and property are efficiently managed and very ex- tensively developed along the most modern lines. The equipment in service includes an electric compressor, air-drills, a 350-ton stamp mill, cyanide plant, 1,200-horsepower electric plant, Ball mill, Dorr thickener tank, etc. In addition to the annual production of silver fair amounts of gold (15,904 ounces in 1916) are obtained. The $10 par value shares of the New York & Honduras Rosario Mining Co. have been quoted during 1916 and 1917 at prices ransrino- from $13 to $19 per share. s s A number of other properties are being or have been operated in a small way during recent years. The Santa Lucia Mine near Tegu- cigalpa, a famous producer during the Spanish period, was at last accounts under the management of local interests. It is claimed CENTRAL AMERICA HONDURAS. 427 that large returns could be realized from this, property, if it were extensively developed. The Socorro Mine,' in the district near Tegusigalpa, which covers an area of about 300 acres and produces gold and silver, is the property of the Socorro Gold & Silver Min- ing Co., a British concern (5 Fenchurch Street, London, E. C, Eng- land), capitalized at £120,250. The production for 1914-15 was esti- mated at £11,552, and the loss for the year's operations amounted to £4,771. The Antigua Gold-Copper Co., an American company in- corporated in 1907, with a capitalization of $2,000,000, acquired 531 acres at Minas de Oro, Department of Comayagua (about 100 miles southeast of Puerto Cortes). The property was worked in early days and showed outcroppings of gold and copper. The assays at the time of the organization of the property were stated to show 2 to 3 per cent copper, 2 to 4 ounces silver, and $2 to $4 gold per ton, in lime- stone. A stamp mill of 30 tons daily output and other improvements were installed by the company. No recent statement of operations is obtainable. Copper ores are found in almost every Department of Honduras, but the mines are usually small and development has been very lim- ited. Thus far the most promising deposits have been located in the Departments of Tegucigalpa, Comayagua, and Yoro. In the latter Department a vein is said to have been located with a width in places of as much as 14 feet, extending, it is claimed, for miles and giving ores " assaying 15 to 16 per cent copper." This copper vein and other ore bodies of presumably smaller dimensions occur about 40 miles from the Uloa River, in a region not easily accessible under present transportation conditions. As stated,- mineral traces and abandoned Spanish workings are widely scattered throughout the Republic. An extensive iron deposit exists at Agalteca, about 48 miles northwest of Tegucigalpa, this ore body being said to contain 100,000,000 tons. Efforts have been made to raise sufficient capital to develop this ore body, but these efforts have thus far been unavailing. Iron is found in other sections of the mountain ranges, and traces have been seen of lead, antimony, alum- inum, zinc, nickel, coal, kaolin, asphalt, saltpeter, chalk, petroleum, etc. Some exploitation of petroleum has been carried out in the .Puerto Cortes district, and some hopes are expressed that paying quantities of the oil may be obtained. Similar predictions are made concerning the Pacific coast section of the Republic. Gold washing is carried on in many of the streams, and sometimes 1,000 or more of the inhabitants are daily engaged in the work. This primitive method of obtaining the precious mineral is said to pay a modest yet ample return to those engaged in the industry. Juticalpa is the center of this industry. Some hopes are entertained that certain deposits of antimony located in the Lake Yojoa and Yoro districts may in time be worked with substantial profits. Shipments of very high-grade ore have been made, but the profitable development of the mines await better transportation facilities. Taken as a whole, Honduras will presumably take first rank in the future among the Republics of Central America as a producer of minerals. The country at present, however, is almost devoid of means of transportation. There is only one railway that can really 428 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. be spoken of as a common carrier, only a few isolated river transporta- tion lines, and an almost complete absence of roads or even trails. When these transportation difficulties have been overcome (a some- what difficult matter, considering the mountainous nature of such a large part of the country) the future of the industry seems assured. AGRICULTURAL AND PASTORAL INDUSTRIES. The United Fruit Co. has been the prime mover in the agricul- tural development of Honduras. This company had invested to September 30, 1916, the sum of $7,614,535 in the Eepublic, this including $917,130 in lands, $849,641 in cultivation, $805,028 in houses and other buildings, $3,777,408 in railways, $253,651 in wharves and lighters, etc. The company owned 18,435 acres of im- proved and 144,702 acres of unimproved land, and leased 170 acres of improved and 16,938 acres .of unimproved land. Of the land under cultivation, 12,914 acres were used for raising bananas, 97 acres for coconuts, and 21 acres for rubber. In addition, 1,531 acres were used for pasturing live stock, 420 head of cattle, 977 mules and horses, and 143 other animals being owned. The railway and tramway lines serving the company's properties totaled 183 miles and 9 miles, respectively. In addition to the United Fruit Co., extensive plantations are owned by Vaccaro Bros. & Co., the Cuyamel Fruit Co., etc. There are also a number of independent planters. Concerning the condi- tion and future of the industry United States Consul Walter F. Boyle, at Puerto Cortes, reported under date of January 13, 1917: During 1916 the banana industry suffered many reverses, with resultant unsatisfactory business conditions. The " chapulin," or locust plague, continued unabated and destroyed a large quantity of fruit as well as many other crops. There were several bad blow-downs at various places in the district and a long series of floods which retarded for several months the fertile banana-producing territory along the Ulua and Chamelecon Rivers. Short periods' of overflow do not affect the banana crop ; on the contrary, the silt brought down by the flood improves the soil, but long and continued periods of overflow damage the plants and retard production for many months. The cultivation of the banana is simple. The land is cleared by felling the big trees and burning the underbrush, then the bananas are planted and sub- jected to a semiannual cleaning and pruning with the big sword-like knife . known as a machete. There is no plowing, harrowing, or laying by of the crop ; the stumps and trunks of the felled trees are not removed from the land, and in p few years they decay and thus return to the soil much needed humus required by the banana plant. The real problem is that of rapid transportation and distribution, which requires a system of railroad and tram lines in Honduras, terminal facilities, steamship lines, and a marketing organization in the United States all working together. Cuttings are ordered by telegraph and must be accomplished in from 24 to 36 hours, and once the fruit is cut every handling follows in quick succession, day or night. The banana bunch or stem is divided into " hands," and the individual bananas growing on the hands are known as fingers. The standard or payable bunch is the one of nine hands or over. Many short-hand bunches go to waste annually. Banana exports to the United States in 1916 totaled $2,885,776 (10,654,369 bunches) . Coffee, coconuts, cacao, rubber, sugar, as well as maize and various cereal crops are grown in moderate quantities. The coconut Indus- CENTRAL AMEEICA HONDURAS. 429 try of Bay Islands is important, there having been exported to the United States in 1915 and 1916 (largely from Bay Islands) 12,359,- 645 and 9,676,982 coconuts, respectively, valued at $220,289 and $306,758. Coffee exports to the United States in 1915 and 1916 totaled $55,922 and $43,260. Crude rubber exports to the United States in 1916 were valued at $49,622. The cattle industry gives signs of promise. Honduras is an excel- lent cattle country, although exports of the animals have been greatly retarded owing to the presence of tick. It is estimated that there' are between 350,000 and 400,000 cattle in the Republic, and it is claimed that a meat plant would handle a substantial business for export. During 1915 and 1916 cattle products (mostly hides) were shipped to the United States to the value of $294,250 and $352,133, respectively. Live cattle are also exported to British Honduras, although not in very large numbers. Formerly a considerable num- ber of cattle were shipped to Cuba, and of late several attempts have been made to revive the trade. Following the introduction of improved stock for breeding pur- poses and the establishment of a small refrigeration plant; probably at San Pedro Sula or Puerto Cortes, it is estimated that 50,000 beef cattle might readily be marketed annually. FOREST WEALTH. Honduras contains considerable timber wealth, including ma- hogany, rosewood, cedar, pine, and other kinds of wood. Although a great many of the trees, located within short distances of the various Carribbean ports, have been cut, there are still countless trees standing in the less accessible interior, along the banks of streams and elsewhere. Some of the timber companies have built railways into the thickly timbered districts, and further extensions- along these lines will doubtless be carried out. The establishment of better means of interior communication and the improvement in the marine shipping situation will probably bring about the rapid expansion of the timber industry. In addition to the less accessible hardwoods, pines, etc., there are large areas, of assorted softwoods that might be available for making paper, etc. MANUFACTURING. Honduras lays no claim to being a manufacturing country, its de- velopment in that field being probably the smallest of any country in Latin America. The following table was compiled by Special Agent Garrard Harris, of the United States Department of Com- merce, from the records of the Department of Promotion of the Honduras Government : Department of Tegucigalpa. — Population about 85,000. Two small shoe- making plants ; two small soap and candle factories, one with a small sawmill attached; three makers of bottled soft drinks; one ice plant, bottled-drinks establishment, and small sawmill ; two small breweries ; one factory making sugar and aguardiente, or rum ; one small gristmill ; one small sawmill ; one small cigar factory, and one making cigars and cigarettes ; one hat factory, making straw and palm hats ; two makers of brick and dealers in cement ; one marble yard, handling also bricks and cement; two small bakeries; one small 430 INVESTMENTS IN LATIN AMERICA AND BBITISH WEST INDIES. candy factory ; one leather-working shop ; and five establishments making aguardiente only. Department of Atlantida. — Population about 10,500. One factory making aerated water ; one making bottled soft drinks ; another making soft drinks and ice also ; one making ice solely ; and one making aguardiente. Department of Valle. — Population about 34,000. One soap factory; four mating " aguas gaseosas " or aerated water, soda pop, etc. ; one ice factory ; and one tanyard. Department of Choluteca. — Population about 47,000. Four soft-drink bottling establishments;, one brick and cement establishment; one tanyard; and two factories making aguardiente. Department of Cortes. — Population about 24,000. One soap and candle fac- tory ; two distilleries making aguardiente ; one making soft drinks ; and three ice factories. All are small. Department of La Paz. — Population 28,000. Two distilleries making aguar- diente, and one making wine from oranges. Department of Islas de Bahia. — Population 5,000. One soft-drink factory ; one making ice and ice cream ; and two boat-building yards. Department of El Paraiso. — Population 7,000 (estimated). Four aguardiente stills and one soft-drink factory. Department of Copan. — Population 44,000. Thirteen factories making "puros" or native cigars, and four stills making aguardiente. Department of Colon. — Population 15,000. One ice factory. Department of Yoro. — Population 20,000. Three aguardiente stills. Department of Santa Barbara. — Population 37,000. Five aguardiente stills; one sawmill ; and one soap, candle, and ice factory combined. Department of Ocotopeque. — Population 19,000. One gristmill, and one aguardiente still. Department of Olancho. — Population 45,000. Two straw-hat factories, "and two aguardiente stills. Department of Oracias. — Population 40,000. One straw-hat factory, and two aguardiente stills. Department of Intaouoa. — Population 27,000. One hat factory (straw or palm), and one aguardiente still. Department of Comayagua. — Population 30,000. Four aguardiente stills. SURVEYS BY AN AMERICAN COMPANY— PROPOSED UNDER- TAKINGS. According to a report by United States Consul E. M. Lawton, an American company during the past two years has been making ex- tensive surveys and study of the mouth of the Patuca River in order to form an estimate of the cost of properly developing the Mosquito Reservation. The Honduras Government is now considering the proposals made by this company. The project is distinctly in line with a measure passed at a recent session of Congress for a free port at the mouth of this river, espe- cially for the development of that section. The. concessionaires propose to dredge the Patuca bar to admit ocean-going steamers ; to build wharves at the new port of Herrera, together with customhouse, " comandancia," and all necessary Gov- ernment buildings ; install wireless telegraph and telephone systems, and erect lighthouses, all of which will become the property of the Government at the expiration of the concession. For its own use the company proposes to erect sawmills, turpentine stills, dye works, sugar refinery, and meat-packing house. In addition to the improve- ments of the bar and the Patuca River it expects also to build canals connecting the Patuca and Wanks Rivers with the Caratasca La- goon, so that not only the Patuca but the Wanks River as well will have navigation facilities. CENTRAL AMERICA — HONDURAS. 431 The company asks for Government grants of timberland to the extent of 125,000 hectares of land (about 310,000 acres), to be selected on alternate sides of the river and alternating with Govern- ment tracts. The duration of the concession is 25* years. The estimated cost of the bar dredging and lighthouse is $100,000 and a like sum for the necessary wharves and wireless station. Honduras, despite its lack of transportation facilities, is a country offering numerous opportunities for development and is a field cer- tain to attract American capital. NICARAGUA. INTRODUCTION. The Republic of Nicaragua, with an area of slightly more than 50,000 square miles, is presumed to be the largest among the Cen- tral American countries. Its estimated population is 600,000, of whom about 35,000 reside in Managua, the capital, 45,000 in Leon, and from 15,000 to 20,000 each in Chinandega, Granada, and Masaya. A large majority of the inhabitants live in the western and north- western sections of the Republic. The principal ports are Corinto, on the Pacific Ocean, and Greytown, Bluefields, and Cabo Gracias a Dios on the Caribbean coast. The principal exports of Nicaragua are coffee, hides and skins, gold, hardwoods, and bananas. The principal customer is the United States, France usually ranking second. The country is primarily given up to agriculture, although mining, cattle raising, and timber cutting have received attention. The United Fruit Co. holds about 170,882 acres of land in Nicaragua, all of which is unimproved. FUNDED DEBT. Nicaragua's financial history virtually dates from 1827, in which year it assumed approximately £27,200 of the debt of the dissolved Central American Federation. This debt was settled in 1874. In 1886 £285,000 bonds of the Nicaragua Railways, bearing inter- est at the rate of 6 per cent per annum, redeemable in 1919, were issued, being publicly offered at 92^. This issue was converted in 1909 into 6 per cent bonds authorized during that year, the basis of exchange being £86 in new bonds for each £100 of the railway bonds. In 1904 a 6 per cent loan to the amount of $1,000,000' United States gold was negotiated at 75 per cent in the American market, this loan being retirable at the rate of $200,000 every five years until final maturity. In 1905 a small loan was contracted in Europe, being in the form of an advance against collateral. Both of these loans were converted or redeemed in 1909 (see next paragraph). The Government authorized in 1909 £1,250,000 6 per cent sterling bonds, of which £500,000 were to be iised to convert or redeem the various outstanding loans, as above, £570,000 for the construction of a railway line from Lake Nicaragua to the Caribbean Sea, and £180,- 000 for the general purposes of the Government. The bonds were offered in London and Paris at 92 and 93£, respectively, or were ex- changed for the bonds of the Railway Loan at 86 per cent. Certain customs receipts and revenues were assigned for the annual service of the loan, which amounted to £87,500. The cumulative sinking fund was to have retired the loan within 35 years from January 1, 1910. 432 CENTRAL AMERICA NICARAGUA. 433 Interest on the loan was paid through 1911, partly through unex- pended principal, but was suspended in 1912. In the same year an agreement was entered into between Brown Bros, and J. & W. Seligman, of New York, representing the Republic of Nicaragua, and the Council of Foreign Bondholders, London, representing the bond- holders. Under the arrangement the January, 1912, coupon was paid in full and the July, 1912, and January, 1913, coupons at the rate of 5 per cent per annum, the necessary amount being provided through the unexpended balance of the principal of the 1909 loan. All future coupons were to be at the rate of 5 per cent per annum. The arrears in the sinking fund were to be paid and the fund was to be maintained at 1 per cent per annum during the life of the loan. The bondholders were to have an unconditional first lien on the customs revenues during the life of the loan, relinquishing their rights to any other security. In the event of failure to make neces- sary payments on the loan the interest was to revert to the former rate of 6 per cent. In January, 1915, the interest on the loan was suspended owing to the falling off in customs revenues and the general financial condi- tion of the country, due to the war. In accordance with a law passed in March, 1915, four-fifths of the coupons due January, 1915, were paid, with interest at 6 per cent to April 30 on the full amount of the coupons. The Government made arrangements for the future service of the loan, but owing to the continued depression was un- able »to carry these arrangements into effect. These bonds were quoted in January, 1918, at 60. Of the original issue of £1,250,000 bonds, £1,179,620 remain outstanding. Mention should be made of the financial plan adopted by Nica- ragua in the law of February 14, 1917, for the purpose of reorgan- izing and consolidating certain of its external and internal debts. In accordance with this law a Commission of Public Credit was established, consisting of three members — one, a citizen of Nicaragua, appointed by the President of the Republic; another, a citizen of the United States, appointed by the Secretary of State of the United States; the third, acting as umpire in case of disagreement between the other two members, appointed by the Secretary of State of the United States from among the Permanent Nicaraguan Group Com- mittee established during the Pan American Financial Conference in Washington in 1915, this third person being a citizen of the United States. The function of this Commission of Public Credit is to examine, classify, and consolidate the Nicaraguan debt by using the unex- pended moneys remaining from the purchase of the canal option rights under the treaty with the United States and a reasonable amount of internal bonds. This commission will also make -agree- ments with creditors when this method is necessary and is for the mutual advantage of both parties. According to the financial plan, the National Bank of Nicaragua shall be a depositary of the funds (general revenues) of the Gov- ernment, and all payments made by the Republic shall be by check or draft of the Minister of Finance or of such deputy as he may appoint for that purpose, and shall specify on their face the par- 63018°— 18 28 434 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. ticular budget account against which they are drawn, and no checks nor drafts shall be drawn except as thus produced. All checks or drafts paid by the bank shall be retained by it and shall be vouchers for and conclusive proof of the payments to which they respectively refer. The bank shall open a separate account for each item of the budget, and if the funds to the credit of such account shall be suffi- cient, shall honor checks or drafts against it up to an aggregate amount not exceeding the amount of such respective item; but, ex- cept as thus expressly provided, the National Bank shall not be obligated to inquire into the correctness of such payments' nor into the powers or authority of the person who may from time to time act as Minister of Finance or of the Government by him represented, and all payments made in good faith upon checks or drafts drawn by such Minister of Finance or by his deputy shall be full protection to the bank. Brown Bros. & Co. and J. & W. Seligman, bankers of New York City, connected with the Mercantile Bank, signed a contract on September 1, 1911, with the Government of Nicaragua which gave them the right to establish the National Bank of Nicaragua. RAILWAYS. There is only one railway line of commercial importance in Nicaragua. This is the Pacific Railway of Nicaragua, which has its Pacific terminus at Corinto, on the Pacific Ocean. A large por- tion of the line was built during the eighties and nineties, the entire system being completed in 1903. The construction cost of the first 90 miles of road, completed between 1883 and 1886, was $2,005,584, this sum including the cost of some small river and lake steamboats. After leaving Corinto the railway follows the Pacific coast in a northwesterly direction for a short distance and then strikes north- easterly to Chinandega. Leaving that city the line abruptly turns in a southeasterly direction, running to Leon (the largest city in the Republic), Managua, Granada, and Dinamba, the total mileage being approximately 163. In 1912 a company was formed to reorganize and take over the road, 51 per cent of the stock to be held by Ameri- can bankers and 49 per cent by the Eepublic of Nicaragua. Part of the proceeds of the Government loan of 1909 were, it was expected, to have been used to construct a line from Lake Nicaragua to the Caribbean Sea, opening to the outside world a large tract of more or less valuable territory and providing a means of outlet to Atlantic ports for the products of ±he western uplands. The distance from Lake Nicaragua to the port of Greytown on the Caribbean Sea is not more than 75 miles. The construction of this line and the improvement of the port of Greytown would prove of inestimable benefit to the Republic and would do much to restore its former prosperity. Several other railway schemes to open up eastern Nicaragua have been talked of and a number of lines wholly or partly surveyed. It is presumed that the International Railways of Central America will eventually link up with the existing Pacific Railway of Nicaragua. and will then be carried through to Costa Rica and possibly Panama. CENTRAL AMEKICA NICARAGUA. 435 PUBLIC UTILITIES. Some steps have been taken in the development of public utilities. Managua, the capital, Leon, Granada, Corinto, Chinandega, and a few other places have electric lighting systems presumably adequate for their respective needs, although further opportunities will doubt- less arise from time to time. Approximately 806 miles of telephone lines have been laid out in the Eepublic, and there are 30 stations. The telegraph lines (which, together with the telephone lines, are operated by the Nicaraguan Government) cover 3,637 miles, and there are 130 offices. / MINING ENTERPRISES. The mineral development of Nicaragua is likely to assume consid- erable importance in the future. Gold is the most important mineral mined at present. A very small amount of copper is produced as a by-product from the smelting of silver ores. Copper has also been located on the Caribbean coast and along the Mico and Escondido Rivers. Very promising belts have been located in the Department of Segovia (near the Honduras boundary), but development is al- most impossible owing to the rough nature of the country and the general lack of means of transportation. Copper has also been found in the Departments of Leon, Zelaya, and Matagalpa. Gold is found in the Pis Pis mining district and elsewhere in the Republic. In November, 1914, the Tonopah Mining Co., a large American concern, acquired a majority of the $1,000,000 stock of the Eden Mining Co., controlling 9 square miles in the Pis Pis district. A fair amount of development and construction work has been car- ried on, and it was expected that ore shipments would begin during the year 1917. Net average values of ore were reported to be $13 to $15 per ton, with mining and milling costs less than $6 per ton. The electric power is obtained from the Tunkey Transportation & Power Co., which was organized to acquire and operate the power plant, railroad, and river transportation, the entire stock of the latter com- pany to be held by the Eden Mining Co. The Pis Pis mining fields are not readily accessible, and the estab- lishment of transportation facilities will be of the utmost benefit to the entire district. The usual means of transportation at present are gasoline launches, canoes, and mules, the trip covering more than a week. In addition to the Eden properties, the Tonopah Mining Co. has acquired 93 per cent interest in the Tonopah Nicaragua Co., organ- ized to operate the Santa Rita mines, located some 30 miles from the Eden mines. A force of men was sent early in 1917 to clear the prop- erty, and it was expected that shipments would begin before the close of the year. A British company known as the Nicaragua Development Syndi- cate, incorporated in 1900, is in control of several of the important mining properties in the Republic, these comprising the Santa Rosa mines, the Quilali mines, and the San Juan Talpaneca mines. The capitalization of the company is £14,885 ordinary and £21,112 10 per cent cumulative preference stock, on which no dividend is being 436 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. paid. The company has done considerable development work but has not yet placed the mines on a profitable basis. The Central American Mines (Ltd.), a British company incor- porated in 1913, as a reconstruction of the Oroya Leonesa (Ltd.), holds the Leonesa, La Reina, and Espanol mines. The capitalization of this company consists of £150,000 shares of 5s. par value, of which £112,503 10s. has been paid up; also £35,000 6 per cent debentures, redeemable at par on November 30, 1917, and convertible into stock at par. A plan is said to be under consideration to place the prop- erties in good financial condition. The mines are said to be ex- tremely rich and to offer excellent opportunities for extensive devel- opment. The gross receipts for the calendar year 1914 were £38,- 379 ; for 1915, £47,193 ; and for the first nine months of 1916, £31,304. The treatment plant was shut down during part of the period under discussion and all available efforts were concentrated on development work. The Oroya Leonesa (Ltd.), which this company succeeded, was registered in Great Britain during the year 1910. A battery of 20 stamps, together with cyanide and slime plants, are owned. In addition to the mines here described there are a number of gold properties, more or less valuable, some of which are producers. There are also some silver mines, but these are mostly small and of little importance. Mining claims are not difficult to obtain in the Republic and water-power rights are readily granted. A mining claim consists of approximately 12,335 acres, and a moderate monthly rental is payable. There is an export tax on gold amount- ing to 48 cents per ounce. AGRICULTURE. As previously stated, the United Fruit Co. owned, at the close of 1916, 170,882 acres of unimproved land in Nicaragua, the company not being actively engaged in that Republic. At the same time the Atlantic Fruit Co. held about 125,000 acres of land. Individual planters of bananas are fairly numerous in the country, the exports of the fruit in 1914 amounting to .more than 1,500,000 bunches. Sugar cane is grown in the Departments of Chinandega and Leon, the largest property being owned and operated by the Nicaragua Sugar Estates (Ltd.), which company, according to a statement of Special Agent Garrard Harris, of the Department of Commerce, produced 4,800 tons in 1913 and 4,000 tons in 1914. There are sev- eral other estates producing from 100 to 800 tons per annum and a number of smaller producers. Prospects for the development of the sugar industry are said to be excellent. Coffee is the principal agricultural product of the country and forms the bulk of its exports. Large portions of the western section of the Republic are suitable for coffee growing. Coconuts, cacao, cotton, rubber, and a few other products are raised and exported in a moderate way, and there are sufficient cereals for the needs of the inhabitants. Methods of cultivation, although improving, are crude. The country as a whole is primarily agricultural and will continue so for a considerable period. CENTRAL AMERICA NICARAGUA. 437 CATTLE AND OTHER LIVE STOCK. The cattle industry bids fair to assume considerable importance in the Republic. Small but hardy animals are raised, and there is a good market for the beef at home and in Costa Eica. The possible construction of a railway at some future date would facilitate trans- portation to the latter Republic. Most of the cattle are ranched in the western section of the Republic, particularly in the Departments of Chontales, Matagalpa, and Jinotega. Endeavors are being made, through the importation of high-class stock, to improve the general breed. There is plenty of good grazing land available. Sheep are also raised in the Republic, but not in very large num- bers. Practically none of the animals are exported. A few horses are also raised. FOREST PRODUCTS. Despite the fact that Nicaragua contains almost every variety of hardwoods and a vast amount of timbers of other descriptions, there is only an extremely small number of sawmills, all small and crude. The expansion of the timber industry, needless to say, awaits better transportation facilities. In 1914 mahogany was exported to the approximate amount of $430,000 (10,127,000 feet), this indicating the possibilities of the industry under better conditions than now exist. MANUFACTURING. Very little development has been carried out in manufacturing. A few small ice factories, perhaps a dozen sawmills, some furniture and cabinet-making establishments, a bottling plant or two, and a few small hat factories form the bulk of the manufacturing concerns. FOREIGN CAPITAL INVESTED. The amount of foreign capital invested in Nicaragua has thus far not been large. Great Britain, holding probably more than £1,000,000 of the Government loan and a number of mining properties, has perhaps the largest interests in the field. The United States, with banking, agricultural, mining, and other enterprises, is probably next in order, while a small amount of German capital has been invested in coffee plantations and other industries. PANAMA. INTRODUCTION. The Eepublic of Panama comprises the isthmus of the same name, with the exception of the narrow strip bordering the Panama Canal and officially known as the Canal Zone. The area of the Isthmus is 32,380 square miles, and the population in 1912 was 341,090. The Republic is traversed by mountain ranges, and its climate varies, according to altitude, from torrid to temperate. The rainfall throughout the Caribbean coastal region is considerable, sometimes exceeding 150 inches per annum. The average rainfall for the Pacific slope is much lower, seldom exceeding 65 inches per annum. Panama City, the capital and Pacific port, has an estimated popula- tion of 60,028, while Colon and Cristobal contain approximately 29,000 inhabitants. The other cities of the Eepublic are not large: David, the capital of the Province of Chiriqui, has about 6,000 people and the Atlantic (Caribbean) port of Bocas del Toro approximately 3,500. According to the statement of the Panamanian Government pub- lished in 1914, the total valuation of private property in the Eepublic was $33,175,501, of which $17,487,469 was in Panama' City and Province. Of the total, $18,791,907 represented houses, $5,730,290 lands, and $4,705,125 cattle and horses. The foreign trade of Panama for 1916 amounted to $14,704,179, as compared with $12,279,470 for 1915. The imports for 1916 amounted to $9,197,454 and the exports $5,506,725. Of this total trade, about 85 per cent was with the United States. Agricultural products formed the bulk of the exports. NATIONAL DEBT. According to the report of the Secretary of the Treasury of the Eepublic of Panama, the total outstanding liabilities on September 30, 1916, were $6,755,443. The expenditures for the calendar years 1917 and 1918 were estimated at $7,198,170, and it is stated that the estimated receipts of the Eepublic would be sufficient to provide for these expenditures. Practically all of the external obligations of the Eepublic are held in the United States. The National City Bank of New York arranged in 1914 to take an issue of 5 per cent 30-year gold bonds, at 97, as issued. A large proportion of the proceeds was to be used for the construction of the Chiriqui Eailway (see p. 439), running from Pedregal on the Pacific coast to the Boquete coffee district. The maturity date of this issue is March 1, 1944, interest is payable May and November, and bonds are retireable through sinking fund at 102^. The Government of Panama may call the issue at 105 and interest. There has been issued $2,250,000 of these bonds. 438 CENTRAL AMERICA PANAMA. 439 In 1915 the firm of Lawrence Turnure & Co., of New York, issued, in behalf of the Government of Panama, $1,200,000 5 per cent se- cured serial gold bonds, maturing $130,000 December 1, 1917, $130,000 annually thereafter including December 1, 1924, and $160,000 December 1, 1925. Interest is payable June and December, and the issue is secured by the income from the $6,000,000 constitu- tional fund of the Republic, which is invested in New York real estate first mortgages. The net revenue from this fund for the year 1915 amounted to $256,160. No additional bonds may be issued against this fund as long as this particular issue is outstanding. There is also outstanding an issue of $1,250,000 12-year 5 per cent bonds, dated 1916 and due 1928. RAILWAYS. The most important railway on the Isthmus is, of course, the Panama Eailroad, owned and operated in the interests of the United States Government, the holder of its $7,000,000 stock. The railway extends from Colon to Panama and owns extensive and valuable terminals in the two cities. The total track under the Panama Rail- road control, not including canal construction tracks, was, as of June 30, 1916, 135.88 miles. The gross earnings from the railroad for the year ended June 30, 1916, amounted to $4,559,218, as compared with $3,014,864 in 1914-15, $4,567,406 in 1913-14, and $4,599,163 in 1912- 13. Operating expenses for 1915-16 were $3,674,931 and net earn- ings from the railroad $884,287. Steamship earnings for the year totaled $3,341,279 and net earnings from that source totaled $1,004,- 373. Other income brought the total receipts of the Panama Rail- road up to $2,532,616, and net income after all charges was $2,453,- 592, as compared with $914,861 in 1914-15, $2,303,340 in 1913-14, and $2,179,176 in 1912-13. The profit-and-loss surplus carried to the general balance sheet, as of June 30, 1916, was $19,341,483. In February, 1914, the Government of the Republic of Panama gave a contract for the construction of a 53-mile narrow-gauge (3-foot) railway located in the Province of Chiriqui, to extend from the Pacific port of Pedregal to David, capital of the Province, thence to Boquete, with a branch from David to La Concepcion. Although operating expenses were not earned during the earlier periods of operation, it is expected that the railway will greatly aid in the development of the rich interior of the Republic. The United Fruit Co. owns or operates a large mileage, mostly radiating from the Caribbean port of Bocos del Toro. These lines were constructed primarily for the banana trade, but handle a lim- ited traffic in passengers and public freight. The total mileage of railways operated in Panama by the United Fruit Co., as of Sep- tember 30, 1917, was 270, in addition to which 19 miles of tramways were in use. Locomotives in service numbered 36, railway cars 590, and tramway cars 24. The cost of the railways owned by the United Fruit Co. in the Republic was $3,587,373 and of the tramways $12,916. A concession was granted by the Government early in 1917, for, the construction of a railway from the Chagres River to Almirante and other places in the Atlantic coastal region. The railway would, 440 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. it is claimed, place Panama City and Colon in touch with a rich and productive section of the Eepublic. The railway mileage in the Republic and Canal Zone, exclusive of tramways and construction tracks, totals about 460 miles. PUBLIC UTILITIES. The public-utility development in the Republic is largely confined to Panama City and Colon. The former place is the only one on the Isthmus containing a traction line. Both of the cities are lighted with electricity and gas and have telephones, good water, and other improvements. The Panama Electric Co., an American corporation, was registered in 1914, as successor to the Panama Tramways Co. The franchises of the company are for 50 years from 1913, with renewal privileges. The road extends from Balboa to Ancon, Bella Vista, and Sabana, traversing Panama City, the total length being 10 miles. Twenty- nine cars are operated. About 2 miles of additional lines are planned. The capitalization of the Panama Electric Co. consists of $1,500,- 000 stock ($2,500,000 authorized) and $1,050,000 first-mortgage gold 5 per cent bonds due 1944. A sinking fund of 1 per cent of the maximum amount of bonds issued will operate between 1920 and 1943. Interest is payable June and December, the bonds are a first lien on the entire undertaking, and the total authorized issue is $2,500,000. The gross earnings of the company for 1915 amounted to $193,779 ; net earnings were $44,755 ; surplus after charges, $7,672. The credit balance to profit and loss as of December 31, 1915, amounted to $60,801. The Panama-American Corporation, with a capitalization of $500,000, is operated in the interest of the Electric Bond & Share Co., of New York, its majority stockholder. The company controls the Telephone Co. of Panama, and also manufactures and serves electricity and ice. The original date of the incorporation of the company was 1904, and the date of the acquisition by the Electric Bond & Share Co. was 1916. The Panama Gas Co., incorporated under the laws of Delaware and controlled by Philadelphia, Pa., interests (Starr & Reed), has recently established a gas works in the city of Panama, and will supply without competition all gas for light, heat, fuel, and power in the city. The capitalization of the company consists of $500,000 stock, par $25, and $700,000 first-mortgage 6 per cent bonds due November, 1935, interest payable May and November, and secured by a first mortgage on the entire undertaking. The Colon Gas Co., under management similar to that of the Panama Gas Co., furnishes gas for lighting, fuel, power, and heat to the city of Colon. The company has outstanding $250,000 stock, par $25, and $400,000 first-mortgage 6 per cent bonds due May 15, 1935, interest payable May and November. The bonds are a first lien on all properties and franchises. An electric lighting and power service was inaugurated at Peno- nome early in 1918. A water system for the city is also planned. CENTRAL AMERICA PANAMA. 441 AGRICULTURE. Panama is primarily an agricultural country, its most important products being bananas and coconuts. The United Fruit Co., whose principal headquarters are at Bocas del Toro, had invested to Sep- tember 30, 1917, $7,392,735 in tropical plantations and equipment. The lands of the company in Panama were carried at a valuation of $905,976, the houses and buildings owned at $769,610, cultivation of lands at $1,238,878, and live stock at $100,715 (see also "Railways"). The amount of improved land owned by the company in Panama was 35,943 acres, and the unimproved acreage totaled 88,298. Of the developed land, 28,288 acres were under bananas, 3,508 under cacao, 788 under coconuts, and 2,246 used for pasturage, the com- pany owning 1,492 head of live stock. The coconut industry seems to have attracted considerable atten- tion in the Republic. There follows an article prepared by Mr. C. M. Brown and included in the general summary of conditions in Panama by Consul General Alban G. Snyder, Panama City, June 1, 1917: Most of the coconuts grown In the Republic are found along the Palenque and San Bias coasts on the northern or Atlantic side of the Isthmus, from which region the annual exportation is about 15,000,000 nuts. The plantations belong to small owners, as a rule, and no cultivation is practiced except machete cleaning at different times. The coconut is the main source of liveli- hood of the San Bias Indians, who own many trees. One large American plan- tation on the Palenque coast, now coming into bearing, consisting of more than 50,000 palms and owned by the Colon Coconut Co., is the only large development in that section. At Coco" Plum Point, near Bocas del Toro, the Franklin Baker Co., an Ameri- can concern, intends to plant 300,000 palms, of which 100,000 have already been set out. Within the past two years the United Fruit Co. has entered the field as a planter of coconuts at Bocas del Toro on land formerly devoted to banana plantations. The Tropical Plantation Co. acquired in 1916 a small property near Bocas del Toro containing 15,000 palms just coming into bearing. This number is to be increased. Besides the Venado plantation, located within the boundaries of the Canal Zone and now -he property of the United States Government, the development of the industry on the Pacific side of the Isthmus includes the plantations of the Boston-Panama Coconut Co., at Mariato, with 100,000 palms ; J. Piza, near Remedios, 25,000; R. Arias, Palo Grande, 15,000; and Isaac Brandon & Bros., about 25 miles from Panama City, 10,000; all except the last named, which is called the Perequete, are not yet producing. This property, the Perequete plantation, is now being enlarged. During the past year a part of its product was used for making copra by sun-drying methods, and satisfactory prices were obtained. The coconuts grown on the Pacific side are known as the Choco variety and are larger on the average than those raised on the Atlantic side, although the San Bias and the Palenque are considered on the New York market as good sized, compared with the average coconut from the West Indies. Climatic con- ditions in Panama are particularly favorable for coconut growing, and in normal times there is adequate and cheap water transportation to the northern markets. High freight rates and lack of shipping facilities due to the war have hindered the development of coconut planting in this country, but the outlook for the industry is bright. The new uses to which coconut oil is being put in the United States have stimulated prices there. The total value of coconuts exported in 1916 was $718,280, as compared with $251,086 in 1915. The number of coconuts shipped was 17,873,324, as compared with 11,462,492 in 1915. Most of the exports were from Colon. There is said to be a very large acreage of coconut lands available in Panama and it is probable that the industry will show continued progress. 442 INVESTMENTS IN LATIN AMEEICA AND BEITISH WEST INDIES. Cacao is being planted to a considerable extent, but the amount grown for export is still comparatively small. In 1916, 359,455 pounds of cacao, valued at $43,490, were shipped abroad. A large number of trees planted during recent years have not yet come into bearing. During the later days of the construction of the Panama Canal a number of employees acquired agricultural areas, mostly located in Chiriqui Province. These areas were planted or were stocked with cattle. There followed a little land boom in the district and com- panies were formed with the object of attracting settlers. Owing to the fact that some of these enterprises were of the get-rich-quick order and that others, although honestly financed and managed, at- tracted a class of settlers wholly unfamiliar with tropical farming, many of the undertakings have failed and in some cases settlers were returned to the United States at the expense of the American Government. Many of the farmers who have come to Panama have made money, however, and the agricultural areas of the Republic are capable of considerable development. The Government of Panama is lending every possible aid to settlers. CATTLE RAISING. The cattle industry in Panama shows promise, there being up- ward of 50,000 of the animals throughout the Eepublic. Breeding cattle may be imported free, and every effort is being made to extend the industry. There is a large amount of good cattle land in the country ; and it is probable that nearly one million animals could be readily sustained. As the industry expands there will be room for the establishment of packing houses, and in 1916 legislation was passed with the view of establishing slaughterhouses and refrigerat- ing plants, the Panamanian Government agreeing to waive all duties on machinery and needed supplies, as well as all taxes for a period of 20 years, and agreeing furthermore to give grants of land of from 1,000 to 1,500 hectares (2,471 to 3,707 acres) to those engaged in cattle breeding. MINERALS. Panama is not without mineral wealth, as gold exists and is mined, while silver, lead, aluminum, and asbestos have been found in various locations. Copper and coal have been located near Bocas del Toro and Golfo Dulce, salt near Aguadulce, manganese at Nombre de Dios and elsewhere, lignite on the Canal Zone, and iron in varying quantities in many places throughout the Republic. Gold was mined in Panama before the Spanish Conquest, and to-day a certain amount of mining is carried on in the Darien Prov- ince, not far from the boundary with Colombia. Gold also exists in the Province of Veraguas and small amounts of it are obtained an- nually. In the Province of Los Santos are old mines, among them the Guacimo at Las Minas, formerly operated by the Boston-Panama Mining Co., an American concern. A shaft was sunk at this mine and considerable effort made to develop it. Gold and copper were found. The mine is presumably idle at the present writing. CENTRAL AMERICA — PANAMA. 443 Manganese, which has been found on the Caribbean coast, has givenpromise of becoming the most important mineral in the Eepub- lic. Exports for 1916 totaled $328,684. The existence of petroleum is known, and concessions have been granted to the Panama- Sinclair Corporation, an American company, to carry out exploitation work. FOREST PRODUCTS. The forest wealth of Panama is considerable, and its development has attracted attention among outside capitalists. A number of com- panies have been formed to cut hardwoods and lumber, but thus far the exports have been insignificant. The Darien district and other sections of the Republic are densely covered with standing timber, including mahogany, cedar, rosewood, and other valuable trees of varied descriptions. Lack of suitable means of transporta- tion and high freight rates have greatly retarded the development of the industry, and the capital thus far invested has scarcely returned even a moderate amount of interest. The timber industry is destined, however, to be of great future im- portance to the Eepublic. The standing trees are worth many millions of dollars. There are said to be no less than 1,000,000 laurel trees in Panama, some exceeding 100 feet in height. The espave, producing a wood not unlike inferior mahogany, exists in numbers estimated as high as 1,500,000, and the caoba tree, somewhat similar in character, is found in vast numbers, those in the Eepublic being worth, it is estimated, nearly $200,000,000. There is also a large evergreen tree known as the calaba, of which there is a great supply. Other valuable woods are plentiful. Such forest products as tagua nuts and balata are gathered in fair quantities. The balata exported to the United States during 1916 was valued at $466,603 and the tagua nuts at $185,457. SALVADOR. INTRODUCTION. Salvador, the smallest of the Central American Republics, occupies an area variously estimated at from 7,225 to 8,130 square miles, being comparable in size with the State of New Jersey. It is bounded on the north and northeast by Honduras, on the northwest by Guatemala, and on its other sides by the Pacific Ocean and the Gulf of Fonseca. Its population is about 1,254,000, and its capital, San Salvador, is a city of about 65,000 inhabitants. The Republic is mountainous, some of the peaks being volcanic, and topographically it may be said to be a succession of mountains, table-lands, and valleys. A number of streams, none of commercial importance, traverse the country. DEBT AND FINANCES. The external debt of Salvador is limited to an issue of 6 per cent bonds and a subsidy payable to the Salvador Railway (see p. 445). The 6 per cent loan was originally for £1,000,000 and was offered in British markets, during 1908, at 86 per cent. Through amortization the outstanding amount has been reduced to £756,900. The loan was originally issued to provide funds for certain important public works and to pay off internal obligations carrying a higher rate of interest. The annual sinking fund was at the rate of 2-J per cent, cumulative, and the bonds were secured by a first charge on the special customs . duty of $3.60 United States gold per 100 kilos of imported merchan- dise and the duty of $0.40 United States gold per quintal (maxi- mum 500,000 quintals) on the annual exportation of coffee. Following the outbreak of the war, which brought about a financial crisis, the Government found itself unable to meet its sinking-fund requirements, although the February, 1915, coupon was paid in cash and arrangements were made whereby coupons due August, 1915, and subsequently to August, 1919, were to be funded into new 7 per cent bonds, the income tax on the coupons so funded to be paid up to 2s. 6d. on the pound by the Government of Salvador. Begin- ning August, 1919, the annual service of £85,000 per annum on the original loan is to be resumed, this sum to be placed first to the payment of interest on the funding bonds, then to the payment of interest on the original bonds, the balance to be applied until 1927 to the redemption of the funding bonds, the issue to be finally retired during that year. Beginning 1928 the sinking fund is to be resumed on the loan of 1908. The amount of the new funding bonds to be issued semiannually was stated to be £27,707. Interest on this issue is payable February and August. The interest on the internal debt of the Republic, owing to the financial depression, was suspended in March, 1915. This internal debt amounted to approximately 7,679,296 pesos. In order to meet the deficit arising from the decrease in customs duties and other 444 CENTRAL AMERICA SALVADOR. 445 revenues, the Government voted for the establishment of an income tax, made various monetary and tariff reforms, and reduced ex- penses. Salvadorean Government external and funding loans are quoted on the London Stock Exchange. A recent quotation (January, 1918) for the 6 per cent bonds of 1908 was 60 and for the funding bonds 78. The 6' per cent bonds may be said to offer opportunities for a semispeculative investment, inasmuch as a general improvement in conditions is being brought about. The total debt of Salvador, as of January 1, 1916, was said to amount to 27,814,318 pesos. BANKS. The Republic has three local banks, the Bank of Salvador, the Occidental Bank, and the Banco Agricola Comercial. All these banks have their head offices at San Salvador, while the Bank of Salvador and the Occidental Bank maintain branches at Ahuacha- pam, San Miguel, San Vicente, and Sonsonate. The capitalization of the three banks is about 6,000,000 Salvadorean pesos, and they are banks of issue. The Government has expressed its willingness to cooperate in the establishment of a foreign branch bank, which, it is stated, would greatly aid in the commercial, industrial, and agricultural development of the Eepublic. Ample business is stated to be available. There is a considerable business in making loans at favorable rates on coffee crops and for other agricultural pur- poses. RAILWAYS. THE SALVADOR RAILWAY. The Salvador Railway operates 100 miles of railways in the Republic, the main line extending from Acajutla, the most impor- tant port, to San Salvador, the capital, 65 miles. The capitalization of the company consists of £250,000 6 per cent noncumulative preference shares (par £10) ; £250,000 ordinary stock (par £10); £190,000 5 per cent prior lien debentures; £566,600 5 per cent mortgage debentures; £21,247 three-year deferred interest certificates. The coupon on the 5 per cent mortgage debentures due August, 1915, was paid half in cash and half in deferred certificates; the February, 1916, coupon was paid wholly in certificates; August, 1916, and subsequent coupons were paid in cash or certificates. In the years before the war dividends were regularly paid on the preference shares, although not always at the full rate. The ordi- nary shares also received frequent dividends, generally at a low rate. In 1911-12 and 1912-13 dividend payments were at the rate of 6 per cent and 2 per cent, respectively, on the preference and ordi- nary shares. No dividend payments were made from the profits for the year 1913-14. The Government allowed the company a subsidy of £24,000 per annum, to expire December 31, 1916. Owing to the effect of the war on the finances of the Republic, payments were sus- pended. The Government has agreed, however, to pay the company 5 per cent per annum on unpaid annual subsidies and to pay the subsidies at the rate of £2,000 per month following the termination of the war. 446 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. This company's ordinary shares were quoted January, 1918, at approximately 15s. per £10 share, as compared with £5 5s., the high price since 1911. Preference shares were quoted at 1^, as compared with 8J, the high price since 1911. Approximate quotations for the two classes of debentures were 89 and 42; high prices since 1911 on these two classes of securities were 102 and 87, respectively. The Salvador Railway is the most important line in the country to-day. In normal years gross earnings amount to about $600,000, and there are prospects that, once normal conditions are restored, business will show a sufficient increase to take care gradually of the future loss of income that will follow the termination of the sub- sidy. The railway becomes the property of the Government in 1974. The company formerly operated three small steamers in the Cen- tral American coastwise service; these were disposed of in 1915 to the Royal Mail Steam Packet Co. INTERNATIONAL RAILWAYS OF CENTRAL AMERICA. This company has been discussed at length in the chapter on Guatemala. The Salvador section, as completed, consisted on De- cember 31, 1916, of 98| miles, while 18.6 miles additional were under construction and about 134 miles to be constructed. The completed section of the railway extends from La Union westward to Zaca- tecoluca, the center of a coffee-producing country. The railway crosses the country between San Miguel and Lempa at the foot of a chain of mountains on which are located extensive coffee planta- tions. At Lempa the river Lempa is crossed. At the beginning of 1917 construction work was being actively carried on beyond Zaca- tecoluca, the idea being to complete the line to San Vicente (15 miles) before the end of the year and to carry it on to Molineros, about 6 miles farther, early in 1918. This entire section will tap a very rich country, from which the railway has never heretofore re- ceived any traffic. San Vicente is a town of considerable size and importance. From Molineros the line will be carried on to San Salvador, the capital (37 miles). This section will connect with further extensions that will carry the system to Santa Ana and thence to the frontier of Guatemala, where a section of the main system will be linked up and through train service established between important centers of the two Republics. A line will also be built to carry the La Union division (already constructed) to the frontier of Honduras, about 20 miles. In Honduras about 88 miles of road are to be built, between the Salvador and Nicaragua frontiers. Earnings of the Salvador Division of the International Railways of Central America for four recent years have been as follows : Years. Mileage. Gross earnings. Ex- penses. 1913 62.5 84.0 97.5 99.0 $35,369 ■ 77, 710 123,882 139, 166 162,425 1914 86,791 1915 113,697 1916 118,709 The cost of the Salvador Division, as carried on the books, as of December 31, 1916, was $1,600,365. Equipment in service as of that CENTRAL AMERICA SALVADOR. 447 date consisted of 7 locomotives, 8 passenger-train cars, 97 freight- train cars, and 3 service cars. PUBL.IC WORKS AND IMPROVEMENTS. In the memorandum furnished by the delegates for Salvador to the Pan American Financial Conference held at Washington in 1915 attention was called to certain proposed public works to be carried out whenever the monetary stringency could be relieved. Chief among these public works were the paving and laying out of a sewerage system in the municipality of San Salvador and in other cities. Some of the paving work was carried out in 1913 and 1914, but was never finished owing to lack of funds. It is believed that the Government, municipalities, and Public Utilities Commission of the Republic would be willing to guarantee jointly the financing of these enterprises. Another undertaking projected by the Government, which will probably not be carried out in the immediate future, is the construc- tion of a line of railway to extend from the port of La Libertad to San Salvador, the capital, about 32 miles. A concession was granted to a British company, prior to the war, to carry on the construc- tion of this line, but all work other than a small amount of prelimi- nary surveys, etc., was suspended following the outbreak of the war and has not been resumed. Other enterprises, mostly municipal public-utility works, have been projected, these likewise being held up owing to existing condi- tions. Following the return of prosperity to the Republic there will doubtless arise excellent opportunities for construction enterprises, and a large part of the work will doubtless be handled by American contracting concerns. MINERALS AND MINING. Salvador is not without considerable mineral wealth, developed and undeveloped. Copper ores are "known to exist in the Depart- ment of Chalatenango, near the Honduran frontier, as well as near Melapan, in the Department of Santa Ana. Some, attempts at mining copper in a small way have been made, but no extensive de- velopment has been carried on. Iron, lead, silver, and gold are also found in Salvador. Probably the most important gold mine is operated by the Butters Salvador Mines (Ltd.). This property consists of 546 acres of gold-bearing land located near Santa Rosa. The company is under Canadian management, having been incorporated in the Dominion in 1912, with a capitalization of $750,000 (par $5). Dividends of $0.25 per quarter have been paid regularly since 1914, the January, 1915, dividend being accompanied by a bonus of $0.12 per share. Profits for 1914 (latest figures obtainable) amounted to $116,042j this being realized from ore sales amounting to $499,911. It is said that the ore reserves of this property are nearing depletion. Another im- portant mine under the control of somewhat similar interests is the Butters Divisadero Co., capitalized at $750,000, owning gold and silver mines at Divisadero, Department of Morazan. This company was incorporated in 1905. The increased price of silver will, it is expected, lead to renewed activity in this branch of mining. 448 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Petroleum has recently been discovered in Salvador, and the field has attracted the attention of foreign capitalists. A company known as the Salvadorean Petroleum Co. has obtained a concession to work a deposit recently located on the Panalapa- Plantation, in the Departments of Santa Ana and Chalatenango. British experts who have studied the petroleum fields of the Republic express the opinion that large quantities of the oil exist of a grade sufficiently high for industrial purposes, and that the industry is likely to expand rapidly. AGRICULTURE— LIVE STOCK— FOREST RESOURCES. The production of coffee is the staple industry of the Republic, forming usually four-fifths of the country's exports. Salvador, like ■Guatemala, is highly suitable for the cultivation of the product and no less than 215,000 acres are planted in coffee trees. As is the case in Guatemala, a number of foreigners (a large proportion German) have been attracted to the industry and good profits have usually been realized. The coffee crop has reached in recent years a total of more than 75,000,000 pounds. The Departments of La Libertad, Santa Ana, Ahuachapan, La Paz, Sonsonate, and Usulutan produce the bulk of the crop, the last-named Department usually occupying first place. Sugar, although a minor crop, is occupying the attention of a num- ber of planters. The Republic contains much land suitable for its growth, and it may in time become an important product. Tobacco, indigo, rubber, rice, and chocolate are exported in small quantities. Although Salvador is thickly populated and the amount of graz- ing country necessarily limited, the cattle industry has, nevertheless, assumed importance and the Republic has for some time past been an exporter (in a small way, of course) of hides and skins. Atten- tion is being given to the breeding of better animals, although there is still room for improvement. There is a good local demand for the beef, although up-to-date killing and packing methods are hardly known. There are large areas of the balsam tree in Salvador, these being found in a section of the coastal belt. These balsam forests are being exploited in a limited way. Mangrove also exists, principally in swampy sections of the lowlands and along the river banks. Ma- hogany, cedar, rosewood, and other hardwoods are found in the in- terior uplands — not in large areas, however, owing to the smallness of the Republic and the fact that a very large portion of the land has been cleared for agricultural purposes. MANUFACTURING. The industrial development of Salvador has been very slight. Such manufacturers as do business in the Republic have little up-to- date machinery and not much skilled labor. A local cotton mill does a good business and could probably increase its output, as the amount of cotton cloth purchased from abroad is rather large. There are shoe factories, turning out a fairly creditable article, small saw- mills and furniture factories, roof and tile manufacturers, rum dis- tilleries, and a few minor manufacturing industries that use little or no machinery, among these being soap and candle makers, cloth- ing makers, etc Part 3.— THE WEST INDIES. THE BAHAMA ISLANDS. The group of islands known as the Bahamas contains about 4,466 square miles and a population of approximately 57,000. The islands. which are of coral formation, are numerous, some of them being un- inhabited. The principal industries of the island group are timber cutting, sponge gathering, and the production of sisal hemp. The production and canning of pineapples, which are of an excellent variety, is also assuming importance as an industry, there being two canneries in operation, one of which is owned by an American com- pany and the other by local capitalists. Practically all of the outsids capital invested in the Bahamas is American. The exports of sponges from the Bahamas now amount to prac- tically $800,000 per annum in value, the islands now being among the world's greatest sponge producers. The business of sponge farming is quite successful and is encouraged by the Government, which, how- ever, is taking measures to conserve the sponges and otherwise pro- tect the industry. Bahama sisal hemp, thanks to high existing prices, is bringing large returns to the planters engaged in the industry. This sisal is said to equal in quality that produced in East Africa and the East Indies and is claimed to be superior to that grown in Yucatan. Mills exist in the islands for the cleaning of the hemp, although a large portion of that shipped is hand cleaned. The value of the sisal shipped in 1915 was about $350,000, as compared with about $230,000 the year previous. Good results were also obtained in 1916. Prac- tically all of the sisal goes to the United States. A large Am&rican company some time ago obtained a concession to cut yellow pine on Abaco Island and has established a large plant at Wilson City, a town founded by the company itself. It is figured that enough timber exists to last for 70 years. About 70,000 feet of yellow pine boards are sawed daily. During the year 1915 the com- pany milled 10,179,000 feet of yellow pine, about two-thirds of which (valued at $129,000) was exported to the United States. About 400 employees are on the pay roll of the company, which, in addition to cutting timber, owns a sawmill, ice plant, stores, etc., and a 14-mile railway, the only line in the Bahamas. Wages amount to about $150,000 per year. 63018'— 18 29 448 BARBADOS. INTRODUCTION. The island of Barbados, British West Indies, is located in lati- tude 13° 4' N. and longitude 59° 37' W., being the most easterly of the Caribbees. It is approximately 21 by 14 miles in size, with an area of 166 square miles. The population is not far from 200,000, the island therefore being one of the most densely populated in the world. Bridgetown, the capital, on Carlisle Bay, has about 25,000 inhabitants, is lighted by electricity and gas, and has a tramway system, which is expected to be electrified shortly. The rest of the population of Barbados is in small towns and villages or in the country. About 70 per cent of the total area of the island is under cultivation, sugar being the principal crop. Barbados is not a Crown Colony, being administered by its own legislative authority. British and local capital are predominant in Barbados. Most of the bonded debt of the island is held in Great Britain. The electric lighting plant is British-owned, as are a number of the sugar planta- tions. The local tramway line is an American enterprise. Canada has extended its banking facilities to the island and has also in- vaded the insurance field. Other insurance companies are British or local. LOANS AND FINANCES. As in the case of other British West Indian colonies, the debt per capita of Barbados is extremely small. The loans of the colony issued prior to December 31, 1916, have been as follows: Loans. Original issue. Amount in sinking - fund. 3fc per cent loan of 1895; interest March and September 15; issued to purchase waterworks from the Bridgetown Waterworks Co. and to extend the service. £3 8s. 9d. to £4 per £100 loan (1883-1904); interest January and July ty per cent public-works loan of 1908; interest January and July 3i per cent public-works loan of 1910; interest January and July 4 per cent public-works loan of 1912; interest January and July 4 per cent public-works loan of 1914 ; interest January and July 4 J per cent school loan, 1916; interest June 30 and December 31 5 per cent war loan repayment, 1917; interest June 30 and December 31 £375,000 60,000 12,000 6,000 14,000 11,000 6,000 20,000 £127,830 30,100 All the loans of 1893 is listed Great Britain ( The other loans The debts of of December 31 of debentures. St. Michael, was 450 have sinking-fund provisions. The 3£ per cent loan on the London Stock Exchange and held mostly in see "British West Indian Bonds as Investments"), have been generally floated in Barbados, the various parishes of Barbados totaled £3,847 as , 1916. Only one loan has been issued in the form This loan, which is the obligation of the parish of originally issued (1880-81) to the amount of £19,000, WEST INDIES — BARBADOS. 451 of which £18,400 had been repaid to 191?. The interest rate is 6 per cent per annum, and the proceeds of the loan were used to erect an almshouse and to improve Queens Park, Bridgetown, Most of the financing carried on by the colony of Barbados has been for the purpose of acquiring or developing productive public works. At the outbreak of war the colony borrowed, in the form of a bank loan, the sum of £20,000 and presented it to the Imperial Government for war purposes. The loan from the bank has been repaid from the proceeds of a 5 per cent loan issued early in 1917. Later in the same year a small loan at 5 per cent was also floated, the purpose being to develop the Barbados Light Eailway. The war loan and the £6,000 school loan are the only obligations not issued for productive public works. The credit of Barbados is excellent, and revenues are generally considerably in excess of ex- penditures. BANKS. The banking facilities of the island are furnished by the Colonial Bank, which operates throughout the various islands of the British West Indies, and by the Royal Bank of Canada. The former in- stitution issues currency in Barbados, which is acceptable as legal tender. The bank is capitalized at £2,000,000, in shares of £20, of which £600,000 (£6)- is paid up. Reserve funds amount to £150,000. Twenty-one branches are located in the West Indies or British Guiana. The Government operates a savings bank which is well patronized. The Barbados Savings Bank on March 31, 1917, had 13,110 depositors, with £450,149 to their credit. The interest rate is 3 per cent, and deposits are guaranteed by the Government. RAILWAYS. There is at the present time one steam railway in Barbados, a nar- row-gauge road about 25 miles in length, extending from Bridgetown eastward through the parishes of St. Michael, St. George, and St. Philip to the windward coast, thence northwestward to Bath (where Codrington College is located), Bathsheba, and St. Andrews. The railway is of 2-foot 6-inch gauge and laid with light rail. The oper- ations of the line have been carried on with varying fortunes, and shortly after the outbreak of the European war traffic was suspended. In the early months of 1917 it was reopened by the Government to assist the sugar planters of central and eastern Barbados, freight service only being maintained. Passenger service was expected to be resumed during the summer. Formerly one to two trains a day were operated j the speed maintained not exceeding 15 miles an hour. The road and equipment at this writing are not in the best state of repair. The railway could readily be acquired by responsible par- ties, and there are many who believe that with the construction of an extension from Bridgetown northward along the leeward coast to Speightstown (12 miles) the line would pay. However, the excel- lence of the roads throughout Barbados, the introduction of numer- ous automobiles, the lack of manufacturing industries, and the small- ness of the island do not afford many hopes of large returns. There are at the present time 12 stations on the railway. The former fare between Bridgetown and St. Andrews was 2s. 6d. ($0.61) first class 452 INVESTMENTS IN LATIN AMEBICA AND BBITISH WEST INDIES. and Is. ($0.24) third class. The price paid by the Government for the line was £20,000. A subsidy of £2,000 per annum was formerly paid to the previous owners. PUBLIC UTILITIES. Barbados is comparatively well supplied with public-utility enter- prises. Bridgetown and its suburbs have an excellent water sup- ply, telephone service, electric lighting and gas, and a dozen miles of tramways. Some of these services are extended to various other parts of the island. The water supply of the island was formerly operated by the Barbados Water Supply Co. and the Bridgetown Waterworks Co. Both companies were acquired by the Government a few years ago and the service was extended throughout the various parishes. The Government, in order to make these purchases and extensions, ef- fected the loan for £375,000 mentioned under the head of " Bonded debt." There are five important reservoirs, two with capacities of 1,000,000 gallons and upward. The entire island is piped, and there are standpipes at comparatively short distances apart. The Barbados Electric Supply Corporation (Ltd.) is the concern supplying Bridgetown and suburbs with electricity. A description of the company is given in the Appendix (p. 533). There are more than 1,000 consumers for the electricity, and the company has the contract to light a portion of the city as well as the wharves, etc. Despite the curtailment of this public lighting on account of the war, the earnings of the company are growing steadily and it is an- ticipated that a fair profit will soon be earned. The shares of the enterprise are held in. Great Britain. The street railway service for Bridgetown and its suburbs is fur- nished by the Barbados Tramways (Ltd.), controlled by an American company. This line, at the present writing, is operated by means of mules, although before the outbreak of the war plans were made for the electrification of the system. Bails and other supplies were purchased, but the inability of the company to obtain certain neces- sary construction equipment compelled the temporary suspension of the work. The main line extends from Bridgetown to Hastings and St. Lawrence, 3 miles, and there are approximately 5 miles of other lines. Dividend rates on the company's stock are said to be 12 per cent per annum. The fare charged is 2 cents per half mile. Gas and telephone services are maintained by local companies. The Barbados Telephone Co. had, it was recently stated, approxi- mately 825 subscribers. Between 8,000 and 10,000 calls are handled daily. The total length of line in use is about 2,230 miles. The Barbados Gas Co. (Ltd.) supplies the gas that is used by a compara- tively large number of consumers. The gas works are located at Bridgetown. AGRICULTURE. Sugar cane is the staple product of the island. The whole eco- nomic structure of Barbados is built around the sugar mill and plan- tation, and the ebb and flow of prosperity is almost wholly dependent on the ruling price of this product. The entire island is dotted with sugar mills, and fields of cane may be seen everywhere. The annual WEST INDIES — BARBADOS. 453 average crop is 50,000 tons, and this has been steadily maintained except in years of drought. The ruling high price of sugar during 1916 and 1917 has brought back some of the past prosperity to the island. On various occasions during past years the cost of produc- tion exceeded the value of the crop and fears were expressed that the industry would be ruined. Changed conditions have greatly encouraged the planters and the future is looked forward to with optimism. There are no Crown lands available for settlement in Barbados, and the intending settler or investor in sugar lands must purchase these lands privately. Labor is fairly plentiful and cheap, and the excellent system of roads, together with the railway, enables the planter to handle the product to market without great expense. During recent years the production of sugar has been as follows : Years. Hogsheads of sugar. Puncheons of molasses. 1871 52, 800 50,547 65,010 58, 863 17,795 1891 1901 46,042 61,398 69,036 1906 In 1914, 1915, and 1916 the sugar exported amounted to 29,424 tons, 29,927 tons, and 55,452 tons, respectively. The value of the sugar exported in 1916 was $5,355,622. In 1916 99,062 gallons of rum were exported, valued at $44,193. The exports of molasses in 1916 totaled 9,816,015 gallons, valued at $2,655,036. Sugar estates number 320, of which 107 have steam works. There are four rum distilleries. Barbados is well suited for cotton growing, and a certain amount is raised annually. In 1916 137,718 pounds of raw and 5,305 pounds of linters were exported, valued at approximately $48,000, as com- pared with $83,640 in 1915. There are two cotton factories in the island. Coconuts and fruits are grown in abundance, but are mostly used locally. MINING. There is a manjack mine at Springvale, St. Thomas. Thirty-six persons are employed. A limited market for this product exists in the United States, the exports from the mine in 1916 amounting to $5,339. Lime and limestone are quarried and frequently used for building purposes. A total of 29,037 bags of lime, valued at $7,090, and 2,449 tons of limestone, valued at $1,489, were exported in 1916. Traces of petroleum exist, and the oil has been prospected for. MANUFACTURING. In addition to the gas and electric lighting plants, there are eight factories in the colony, including two cotton factories, two ice plants, two biscuit factories, one manure and chemical works, and one to- bacco and one cigar and tobacco factory. GUADELOUPE. Guadeloupe, the largest island of the French West Indies, has an area of 722 square miles and a population of about 186,000. About one-fourth of the island is under cultivation, about one-half of this being for sugar, one-ninth for coffee, and the remainder for vanilla, limes, vegetables, etc. All industries of the island are closely related to agriculture in its various branches. The soil is extremely fertile. About five-sixths of the exports consist of sugar and its products, one-tenth of cacao, and about 7 per cent of coffee. The coffee of Guadeloupe is among the very finest produced and brings a very good price in the markets of France. Coffee planters throughout the island have, for the most part, enjoyed considerable prosperity dur- ing recent years. The cacao crop usually exceeds $500,000 in value, and is mostly exported. Guadeloupe has outstanding three loans (par 500 francs) origi- nally issued as follows: (1) 3J per cent loan of 1898, final date of payment 1924 through sinking fund, original issue 1,200,000 francs ; (2) 3 J per cent loan of 1901, payable 1926 through sinking fund, original issue 1,500,000 francs; (3) 4 per cent loan of 1908, 1,000,000 francs, payable 1933 through sinking fund. The three issues were quoted in Paris in May, 1918, at 424, 421, and 500 francs, respec- tively. There are no transportation facilities on the island other than automobiles and carriages. Water and lighting facilities are pre- sumably ample. Two banks exist in Guadeloupe, one of which, the Bank of Guade- loupe, is quite important. This bank has a capitalization of 3,000,000 francs, and, at the close of 1915, had deposits amounting to 2,900,- 639 francs. Loans and discounts totaled 5,144,786 francs, and notes in circulation 8,178,720 francs. The total deposits as above showed an increase of approximately 1,000,000 francs as compared with 1914. The bank's profits for 1915 were, however, less than in pre- vious years, and the dividend rate for 1915 was only 2£ per cent as compared with 4 per cent the year before. In 1916 the rate was again 2-J per cent, and in 1917 it was 5 per cent. The 500-franc shares of the bank were quoted in Paris in May, 1918, at 425 francs. The other bank in Guadeloupe is known as the Bank of Com- merce. Its capitalization as of December 31, 1915, amounted to 300,000 francs. 454 JAMAICA. INTRODUCTION. Jamaica, Great Britain's possession among the Greater Antilles, has an area of 4,192 square miles and a population of approximately 850,000 (831,383 in 1911). About 20,000 of the inhabitants are clas- sified as white. Kingston is the capital and largest city. Its popu- lation is upward of 60,000, and it has street railways, electric light- ing, and an ample water supply. The island is largely mountainous, as high an altitude as 7,000 feet being reached. The principal resources of Jamaica are agricultural, although there is much forest wealth and a number of deposits of minerals. Small streams, only a few of which are navigable even for rowboats, abound, and, with the ample rainfall, are of great importance to the farms and estates. The foreign commerce of the island is rather large and the United States is its best customer. The trade for 1915 and 1916 was as follows: 1915— Exports, $10,845,796; imports, $11,- 326,578. 1916— Exports, $13,729,537; imports, $15,120,236. FUNDED DEBT. A very large portion of the bonds issued by the colony of Jamaica are held in Great Britain and quoted on the London Stock Exchange. The important external loans of the colony are the following : Loans. Original amount. Outstand- ing Decem- ber 31,1916. 4} per cent debentures of 1 879 . . 4 per cent debentures, 1881-82. . 4 per cent inscribed stock, 1892 . 3 per cent inscribed stock, 1897 . 3j per cent inscribed stock, 1900 £140,000 892,000 1,099,048 200,000 1,493,600 £2,300 39,500 ,1,099,048 200,000 1,493,600 3,824,648 2,834,448 The total public debt of Jamaica, as of March 31, 1915, was stated as £3,854,305, as compared with £3,735,675 as of March 31, 1905. The amount of government loans expended on public works produc- ing revenues totals £3,081,715. Interest and other charges on ac- count of the public debt, for the year ended March 31, 1915, amounted to £194,172 (£189,170 in 1904-5). The revenues from taxation and other sources in 1914-15 amounted to £1,154,706 (£889,992 in 1904-5) and expenditures totaled £1,221,939 (£970,675 in 1904-5). The balance of the outstanding 4£ per cent debentures of 1879 and the 4 per cent debentures were exchanged for the 4 per cent in- scribed stock of 1892. The 4 per cent debentures were originally 455 456 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES, issued at prices slightly in excess of 97£ per cent, the average being about 98 per cent. Of the 4 per cent inscribed stock, £918,948 was exchanged for the 4£ and 4 per cent debentures and £180,100 was sold at prices averag- ing in excess of 103£ per cent. Interest is payable March and Sep- tember, and a cumulative sinking fund of 1 per cent that operates until 1934 will then retire the issue. The high price for this issue since January, 1911, was 105£, the price January, 1918, being 80. The £200,000 3 per cent inscribed stock was publicly offered in 1897, the prices realized averaging about 100£. The high price since January, 1911, was 87 and the price January, 1918, was 59. Interest is payable January and July 1. A cumulative sinking fund of 1 per cent per annum will retire the issue by 1944, the government reserv- ing the right, however, to retire the bonds in 1922, at par. The 3J per cent inscribed stock was issued in 1900 to the then hold- ers of the Jamaica Railway bonds, the railway property being at that time transferred to the government (see "Railways"). In- terest is payable January and July 24, and the principal is repayable at par on January 24, 1949, the government reserving the right to pay off the issue any time after January 23, 1919, on six months' notice. The high price for these bonds since January, 1911, was 97J ; the price in January, 1918, was 67. All payments on the government loans of Jamaica are made at the office of the Crown agents for the Colonies, 4 Millbank, West- minster, S. W., London, England. BANKS. The banking facilities of Jamaica are furnished by the British-con- trolled Colonial Bank, the Bank of Nova Scotia, and the Royal Bank of Canada. All these banks maintain branches in Kingston, while the Colonial Bank and the Bank of Nova Scotia have agencies at other important towns. In addition to the three privately owned banks, the government maintains a savings institution that is well patronized. There is no room at present for the establishment of additional banks in Jamaica. The Colonial Bank, an important British institution, maintains branches in Barbados, Trinidad, and many of the Windward and Leeward Islands. The bank was incorporated in 1836 by royal char- ter. The subscribed capital is £2,000,000 in shares of £20, of which £600,000, or £6 per sliase, is paid up. Dividends paid during the past 12 years have been either 6 or 7 per cent per annum. Shares of the bank were quoted at £7 in October, 1917, comparing with £5$ at the closing of the London Stock Exchange July 27, 1914. As of June 30, 1916, the bank carried reserves to the amount of £100,000 ; reserves for depreciation, £50,000 ; to be brought forward, £43,700. RAILWAYS. Jamaica is traversed by a system of railways operated by and under the control of the government. This line, with its branches, covers a very large part of the island and is of considerable im- portance. Formerly the railway was under private ownership, and its history dates back to 1843, when the Jamaica Railway Co. was WEST INDIES — JAMAICA. 457 formed by interests in the colony and England. The original pros- pectus was issued in 1844, the capitalization being placed at £150,000 and the par value of the shares being £5. The proposed railway was divided into three sections, and the estimated cost of the whole was to have been slightly more than £150,000. The estimates, as made, were found to be far less than the actual cost, and the close of the year 1845 witnessed the completion of the railway only as far as a point a short distance beyond Spanish Town, the cost having exceeded £220,000. No further construction work was carried on until 1867, when an extension was started with the idea of carrying the railway to Old Harbour, 11 miles beyond Spanish Town. This extension was opened in 1869, at a cost of £60,000. The railway as a whole did not nourish, and during 1879 the owners were glad to dispose of it to the government for the sum of £93,932. A number of improvements were made and new equipment purchased, bringing the total cost of the property to the government up to £201,260. Operations now became profitable, and it was decided in 1881 to build about 39 miles of extensions. These extensions were completed in 1885, the govern- ment having contracted a loan for £635,000 to cover the cost thereof. During the period of the construction of extensions, surveys were made with the idea of carrying two extensions through, one to Port Antonio and the other to Montego Bay, the estimated cost to be £732,072 and £832,399, respectively. Shortly after the surveys were completed negotiations were entered into with an American syndi- cate,, headed by Mr. Frederick Wesson, whereby the latter interests, paying the sum of £800,000, were to take over the railway and op- erate it. The £800,000 was declared payable £100,000 in cash and the balance in second-mortgage 4 per cent bonds. The purchasers agreed to extend the railway 12J miles during the first year and a half of control and 12£ miles per annum thereafter, until the Port Antonio and Montego Bay lines had been completed. The company was privileged to authorize £1,500,000 first-mortgage bonds, £320,000 to be issued immediately and £200,000 on completion of each 25-mile extension. The government agreed to give one square mile of land for each mile of railway completed, and in fulfillment of this promise granted 116£ square miles of territory. The American company took over the property in 1890, and com- pleted the extension to Montego Bay in 1894 and the Port Antonio line in 1896. In 1897-98 interest was defaulted on the first-mortgage bonds, earnings having been below expectations. In 1900 the gov- ernment gave its 3£ per cent inscribed stock in exchange for the out- standing first-mortgage bonds and again assumed control of the property. The land sold to the railway company was also repur- chased for 5s. per acre, or a total of £18,500. During 1914-15 the gross receipts of the railway totaled £179,381, as compared with £114,852 in 1904^5. Operating expenses in 1914-15 amounted to £107,265 (£89,915 in 1904-5). The net profit from operations during 1914-15 was £72,116, as compared with £24,937 in 1904-5. The cost of property to March 31, 1915, amounted to £2,666,725 (£2,476,128, Mar. 31, 1905). The total earnings on the capital investment amounted in 1914-15 to 2.7 per cent, as compared with 1 per cent in 1904-5. The average mileage operated in 1914-15 was 197£ ; the mileage since that time has been slightly increased. 458 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. The United Fruit Co. owns in Jamaica 16.39 miles of railway and 9.08 miles of tramways. Six locomotives, 78 railway cars, and 30 tramway cars are in service, the railways being valued at $99,838 and the tramways at $49,630. These short lines are operated pri- marily to handle the banana traffic of the company and are not really to be classed as common carriers. There are practically no opportunities for the establishment of additional railways in the colony. PUBLIC UTILITIES. The West India Electric Co., incorporated in 1897 in Jamaica and controlled in Canada, handles the electric lighting business in Kingston, Spanish Town, etc., and operates the traction lines in and suburban to Kingston. The Jamaica Light & Power Co. is also owned. The original franchise was for 30 years, with renewal privileges for 20 years. The capitalization of the company consists of $800,000 stock, on which dividends of 5 per cent per annum have been paid for a num- ber of years; also $600,000 (full authorized issue) first-mortgage fold 5 per cent bonds due 1928, with interest payable January and uly at the Bank of Montreal, and secured by a first lien on the entire property. According to the balance sheet of December 31, 1916, property and plant were valued at $1,731,729, cash amounted to $203,666, and all assets were carried at $2,020,278. The surplus to profit and loss totaled $478,144. Of the liabilities, $100,000 represented contingent account. There follows a statement of earnings and operating expenses: Items. Earnings: Traction line Electric light Power Miscellaneous Total Operating expenses Profit on working Fixed charges Surplus Dividends on stock (5 por cent) $206,870 64,582 9,780 7,713 $184,217 70,515 11,714 7,872 288,925 155,229 274,318 143,368 133, 696 50,326 130,950 49,410 83,370 40,000 81,540 40,000 $195,602 66,492 12,958 11,270 286,322 144,065 142,257 49,887 92,370 40,000 A tax of 4 per cent of gross receipts of railways is paid annually to the government, and a rental of $12,000 per annum is paid to the Jamaica Light & Power Co. Passenger cars in service total 44, passengers carried during 191 6, 4,812,754, and mileage operated 26. MINING. There are numerous evidences of mineral deposits in Jamaica, but little has been done to develop them. Copper is said to occur near the middle of the island, the deposits showing veins of 3 to 4 feet in width. A small shipment of ore was made from this mine in WEST INDIES — JAMAICA. 459 about the year 1855, since which time several attempts have been made to form companies to develop the properties. In 1907 the Jamaica Consolidated Copper Co., a Maine corpora- tion, capitalized at $6,000,000, was organized to develop certain of the mineral properties described in the preceding paragraph. A total of 2,276 acres of land at May Pen, Clarendon, were secured. The prospectus of the company stated that " it is not general knowl- edge that the production of copper up to date from Haiti has been $300,000,000." Eesults from operations of the Jamaica property under the management of the American company are unknown. AGRICULTURE AND FRUIT RAISING. Jamaica, like the other West Indian islands, is primarily agricul- tural. Bananas, sugar and rum, cacao, coffee, coconuts, ginger, and tobacco are exported in large amounts. A factor of great importance in the fruit industry is the United Fruit Co. The investments of this company in Jamaica were valued, as of September 30, 1917, at $3,360,027, including land to the value of $1,035,349; houses and buildings, $535,329 ; cultivation, $744,563 ; live stock, $212,485. The acreage of improved land owned was 18,815 (16,419 on September 30, 1916) and of unimproved land 22,297 acres. In addition, 7,798 acres of improved and 13,642 acres of unimproved land were leased. The acreage under bananas amounted to 7,246, this representing about 8 per cent of the total banana acreage in the island. The area of United Fruit Co. lands under coconuts was 4,636 acres ; 310 acres were under cacao, 15 under rubber, and 364 otherwise planted. In addition, about 13,826 acres were used as pasture land, the company owning in Jamaica 221 head of cattle, 936 horses and mules, and 131 miscellaneous animals. As of March 31, 1915, 273,108 acres of land in Jamaica were under cultivation. A very large portion of the remainder was under tim- ber. In 1915 the acreage planted with bananas was 85,854, with sugar 31,727, with coconuts 29,731, with coffee 18,750, with cacao 11,- 088, and with tobacco 881. It is a surprising fact that more tobacco is not raised for export. The quality equals that of the best Cuban tobacco, despite which fact cigars to the value of only $195,846 were exported during 1915, a slight increase over 1914. Inasmuch as many of these cigars were shipped to other British West Indian Islands, there would seem to be an excellent opportunity for a far wider distribution of the product into the United States and a pos- sible chance for the investment of capital in this field. The increase in sugar production and the better prices obtained have greatly encouraged the planters and it is believed that the industry will show continued improvement. About 566,620 hundred- weight of sugar and 1,797,913 gallons of rum were exported in 1916, as compared with 302,88S hundredweight of sugar and 1,309,103 gallons of rum in 1915. There is a strong movement in Jamaica at present in favor of the development of the sugar industry by the establishment of central factories, which give promise of a bright industrial outlook for the future. The Blue Mountain coffee of Jamaica is of a very superior quality, and the coffee planters of the island normally enjoy considerable prosperity. 460 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. A British concern known as the Jamaica Copra & Estates (Ltd.) was registered in 1913 to acquire and develop coconut properties in the island, to export coconuts, copra, etc., and to establish factories for the manufacture of copra. About 1,000 acres of land, situated not far from Port Antonio and containing about 22,700 trees, was acquired. The authorized capitalization of this company is £50,000, in shares of 5s. par, of which £23,882 5s. has been issued. The prop- erty at last accounts was still in its development stages. FOREST RESOURCES. There are upward of 400,000 acres of land in Jamaica under forest, exclusive of scrub land. There are numerous hardwoods on the is- land, including some mahogany, rosewood, satinwood, mahoe, and other species. Under conditions such as exist in Jamaica, where labor is fairly cheap and plentiful, it has been found that sawing the logs by hand is the most profitable method to be employed in the industry. There were, at last accounts, only two sawmills in the colony, one being the property of an American concern. The capac- ity of this mill, which is located at St. Margarets Bay, near Port Antonio, was stated to be 10,000 feet of lumber and 10,000 shingles per day. The other sawmill is located at Kingston. The exports of dyewoods and their products, such as logwood, logwood extract, and fustic, are annually quite large and the indus- try is one of the most important on the island. In 1915 the exports of these dyewood products were valued at approximately $2,000,000. A dyewood extract factory is located at Spanish Town. This con- cern handles a very substantial amount of business annually. The British Dyes (Ltd.) also maintains a small factory at St. Elizabeth. MANUFACTURING. The following review of the slight development in the field of manufactures is reproduced from the monograph, " The West Indies as an Export Field," by Garrard Harris, special agent of the Bureau of Foreign and Domestic Commerce: Jamaica is not in any sense a manufacturing country, nor is there any probability that it ever will be. It is chiefly a producer of raw materials of an agricultural nature, and for many years its commercial life will continue to be based on the exportation of these products, with the island depending upon outside sources for most of its necessities. Kingston, the capital and principal city, has one match factory, one ice factory, two small ale and porter breweries, five aerated-water and " soft- drink " factories and bottling works, four cigar and cigarette factories, one fair-sized fancy-biscuit and cracker factory, a small saw and planing mill, and one tannery and leather factory that has begun the manufacture of shoes from native leather. Port Antonio has an ice factory, a soft-drink bottling works, two factories for turning coconut meat into copra, a tannery, and two small cigar factories. At St Mary there is a small establishment designed to prepare bananas into " figs " or dried bananas, as well as " banana flour." As the principal market for these products was Germany, the business has been practically at a stand- still since the beginning of the war. There is also a small brewery. At St. Anns Bay there is a small establishment for the extraction of essen- tial oils, such as orange-peel oil, etc. There is also a coffee " beneficio," where coffee is prepared for export, as well as a small gristmill for grinding native corn. At Trelawny there is the Cassava Products Co., making starch, etc. WEST INDIES — JAMAICA. 461 At Montego Bay one finds an ice factory, an aerated-water factory, and bot- tling works, and a small establishment making native wines and cordials. At Savanna-la-Mar there are two aerated-water factories, a steam bakery, and another steam bakery operated in connection with one of the bottling works. At Georges Plain there is a rice-treating plant ; also a factory for extracting, treating, and bottling lime juice. At St. Elizabeth the British Dyeworks Co. has a factory making dyes out of logwood, fustic, and the like. At Manchester there is an aerated-water factory. At Trout Hall, in the parish of Clarendon, there is an establishment for preparing bananas as " figs " and flour for export. It is doing a relatively small business on account of war conditions. The same concern also prepares cocoa for export. There is a similar factory at Aenon Town, in Clarendon Parish. At Spanish Town there is a dyewood-extract factory, and at Linstead there is an electrical plant and ice-making company. N FOREIGN INVESTMENTS IN JAMAICA. Although Jamaica is a British colony, the investments of the mother country in its enterprises are not large. Most of the capital from outside sources has originated in the United States and Can- ada. British investments are limited to a portion of the outstanding bonds of the colony, the branches of the Colonial Bank, and shares in some small land-development companies. The United States has become prominent in the field through the investments of the United Fruit Co. The Atlantic Fruit Co. also has land interests in the island, and there are other agricultural estates, together with forest properties, under American management. Canada has financed the local public-utility enterprise, the West India Electric Co., and also has established a number of branches of its banks. No other country has any interests of importance in the island. The increased prices obtained for agricultural products have made Jamaica prosperous, and the improved conditions existing will doubt- less prevail for a number of years. THE LEEWARD ISLANDS. INTRODUCTION. The Leeward Islands, belonging to Great Britain, comprise An- tigua, Dominica, St. Kitts-Nevis, Montserrat, the British Virgin Islands, and several islands of less importance. These colonies, long dormant following the collapse in the price of sugar due to the intro- duction of beet sugar into Great Britain, are showing indications of returning prosperity. They are healthful spots, possessing great natural beauty, and swept by the cooling trade winds. There are many opportunities in these islands for those inclined to follow agri- cultural pursuits in either a large or a small way, and many advan- tages present themselves that are not found elsewhere in the American Tropics. The outer West Indies are destined to enjoy better times, and this fact should not be overlooked. The several islands will be discussed individually. ANTIGUA. Antigua is located in latitude 17° 6' N. and longitude 61° 45' W. Its area is 108 square miles, or about two-thirds that of Barbados, and its population is about 32,000. The island has several harbors, the most important being at St. John, the principal town (popula- tion 10,000). This harbor is more than 2 miles in length and three-quarters of a mile broad, but is not of sufficient depth to pro- vide entrance for the various mail steamers making the port. The anchorage is fairly sheltered, however, and cargo is landed in small sailing vessels. The town itself presents an appearance somewhat better than that of the average British West Indian town. The island has no rivers of importance and a somewhat lower rainfall than most of its neighbors. Droughts, however, are not frequent. BONDED DEBT. The debt of the island is extremely small, consisting of the follow- ing issues : (a) Loan of £900 due Savings Bank. (b) Four per cent debenture issue of 1890, for the laying out of a water system. There is a sinking fund of 1 per cent per annum pro- vided for this issue. At present it amounts to approximately £5,300. (c) Four per cent debenture issue for waterworks, £1,200. Sink- ing fund nearly equals that amount. (d) Four per cent debentures of 1894, to the amount of £100,000. This is the most important issue of the island and was for the pur- pose of providing funds for public works and improvements, includ- ing harbor improvements. The sinking fund of 1 per cent per annum has accumulated upward of £38,000 for the ultimate redemption of the issue. The issue was quoted January, 1918, at 75-77. 462 WEST INDIES THE LEEWABD ISLANDS. 463 Public revenues of Antigua average an amount somewhat in excess of £50,000 per annum, and expenditures are about the same. Sav- ings-bank deposits total £47,553 (at 3 per cent). The banking facili- ties of the island are furnished by the Eoyal Bank of Canada and the Colonial Bank. RAILWAYS AND PUBLIC UTILITIES. There are no railways in Antigua or, in fact, in the Leeward Islands that are, properly speaking, common carriers. There are two lines between sugar plantations and factories, one operating 17 miles of 2-foot 6-inch gauge and the other 3£ miles of 2-foot gauge line. There are no electric lights in the towns and no tramway lines on the island. Probably after the close of the European war, when the town and harbor are once more lighted fully, there will be oppor- tunities for the establishment of a lighting system which will not require any extensive outlay of capital. The government controls the water and telephone systems. There are approximately 195 telephones in use in the island, with 320 miles of wires. Earnings in 1915 were £928 and expenditures £866. Calls totaled 965,994. The water supply of St. John and some 15 other towns and villages is furnished from the Body Ponds and Wallings Reservoirs, and represents an outlay, including pipes, etc., of more than £40,000. INDUSTRIES. The development of Antigua along agricultural lines has been confined to sugar and, in. a smaller way, cotton and pineapples. Antigua pineapples are famous throughout the West Indies, but their production is declining owing to the inability to secure ships properly provided with refrigeration and storage plants. Sugar, the production of which showed a serious decline during the years of low prices, is again supreme in Antigua. There are 71 important sugar estates on the island, occupying a little more than half of the 18,411 acres of land under cultivation (total area of island, 69,275 acres). In the year 1915 the amount of sugar exported was 11,639 tons, valued at £133,788. Molasses to the value of £18,353 was also shipped. In 1914 the. crop exported totaled 15,450 tons. The 1916 crop was far larger than that in 1915, and reaped the benefits of the prevailing high prices. The 1917 crop was slightly smaller than that in 1916. There are several excellent sugar factories on the island, one of which (Gunthorpe's Central Sugar Factory) has a number of shareholders both in the colony and in Great Britain. When sugar prices declined a few years ago the planters of An- tigua turned their attestion to sea-island cotton and produced an excellent quality of this. However, during recent years, the produc- tion of this article has steadily declined until 1917, when, owing to high prices, more attention was given to it. DOMINICA. Dominica has an area of 291 square miles and is located just north of latitude 15° and west of longitude 61°. The population of the island is only about 32,000, making it the most thinly settled of the 464 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. various Leeward and Windward Islands. It is, however, the third largest of the British West Indies. The island is very mountainous, one of its peaks reaching an altitude of 5,000 feet ; only in one sec- tion, the Layou Flats, is there any considerable area of flat country. There are numerous streams and small rivers and vast forest areas containing fine specimens of hardwood timber. Eoseau, lying on an open roadstead on the leeward side of the island, is the chief town and port. Its population is approximately 6,000. Prince Eupert Harbor (also on the western side of the island), on which harbor the town of Portsmouth is located, would make a much better port. BONDED DEBT. Dominica has outstanding three small bond issues, as follows : (a) Five per cent debentures of 1880 to the amount of £5,000, is- sued for public works. There is a sinking fund that has accumulated funds to the amount of approximately £3,300. (i) Four and one-half per cent debentures of 1888, originally issued to the amount of £30,000 to defray costs of roads and bridges. Approximately £12,000 has been accumulated to the credit of the sinking fund. (c) Four per cent bonds of 1895, originally issued to the amount of £30,000. The sinking fund has been accumulated to the amount of approximately £9,000. AH sinking funds are accumulative at the rate of 1 per cent per annum. During recent years the revenues of the colony have generally exceeded expenditures, usually by a substantial amount. These reve- nues now amount to about £50,000 per" annum. Savings-bank de- posits total £19,882. These bear interest at 3 per cent per annum. The Colonial Bank has a branch at Eoseau. RAILWAYS AND PUBLIC UTILITIES. The only railway in the colony is that owned by the Dominica Forests & Sawmills (Ltd.), which was constructed to bring lumber from the estate of that company (see Appendix, p. 533) to Ports- mouth. This line is 3 miles in length and of 3-foot gauge. There is a coastal steamer that normally makes weekly trips touching at the various villages and ports of the island. Eoseau is one of the few cities or towns in these islands provided with an electric lighting system, the electricity being generated by water power from one of the numerous rivers. There is a telephone system in Dominica, operated by the Govern- ment, which provides approximately 158 telephones. There are 305 miles of wire, and 286,779 calls were handled in 1915. The rate is £5 10s. per year, and the receipts for 1915 totaled £726 and the expenses £1,015. A substantial municipal market exists at Eoseau. INDUSTRIES. In the early days of Dominica the principal product was coffee. It is said that in the latter part of the eighteenth century no less than $30,000,000 worth of coffee was exported. Owing to blight WEST INDIES — THE LEEWARD ISLANDS. 465 coffee planting was abandoned and attention turned to sugar, which in turn was abandoned following the decline in sugar prices. The growing of limes then became the foremost industry, and these to-day are the staple products of the island. During 1916 shipments of limes and lime products reached the substantial figure of £151,927, despite the fact that a disastrous hur- ricane destroyed, it is estimated, 117,881 barrels. During this hur- ricane 106,298 trees were lost or blown down. The value of limes produced during the previous year (1915) was £174,404, this crop amounting to 390,000 barrels, as compared with 388,000 barrels in 1914, 391,000 barrels in 1913, and 370,000 barrels in 1912. These limes enjoy a fairly good market outside of the island, and there is demand for a large amount of bottled Dominica lime juice (con- centrated). Cacao comes next in importance to limes and is being cultivated in increasing amounts, despite the fact that the hurricane in 1916 de- stroyed more than 10,000 trees. Exports of the product have not, however, reached the figures attained by lime products, totaling £17,151 in 1916, which was considerably less than in 1915. Coconuts are also grown in fair quantities, and nutmegs form a minor crop. The island is favored by a very heavy rainfall (it is said that rain falls every day in the year in the higher mountains), and it enjoys a rather pleasant and healthful climate. The annual death rate does not average more than 22 per 1,000. There are stated to be available in the island for settlement and cultivation approximately 100,000 acres of Crown land, payment for which, in comparatively large blocks, may be extended over a period of several years. There is an upset price of 10s. per acre on these lands. Dominica is practically covered by forest growth, and many excel- lent varieties of hardwood and other timbers abound. Despite this fact, very little is being done in the way of developing this field. A few years ago a British company known as the Dominica Forests & Sawmills (Ltd.) (see Appendix, p. 533) was formed to develop exten- sive timber areas in the vicinity of Portsmouth. A grant of 25,000 acres was secured, but thus far little has been done other than the construction of 3 miles of railway, and the company has directed its attention to the raising of limes and lime products. There are certain difficulties in the way of getting the timber out of the forests, and fair-sized amounts of capital will be required in developing undertakings of this character. The total value of the exports of Dominica for the year 1916 was £212,301 and of imports £208,197. This is more than double the foreign trade of 10 years ago, despite the fact that the population has remained almost stationary. Dominica is an island that certainly offers opportunities for the establishment of plantations requiring fair-sized investments. MONTSERRAT. Montserrat, frequently spoken of as the "Emerald Isle of the West," lies about 28 miles to the southwest of Antigua. Its area is about 33 square miles and its population 12,500. The island is ex- tremely healthful, the death rate not exceeding 16 per 1,000. Like 63018"— 18 SO 466 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. most of the group, the island is mountainous, one peak reaching the altitude of 3,000 feet. Plymouth (population, 1,500) is the capital and chief port and town. It is situated on an open roadstead on the leeward or sheltered side of the island. BONDED DEBT. The debt of this little island consists of three small, unimportant issues — £10,000 4£ per cent waterworks bonds of 1893; also £200 4§ per cent and £900 5 per cent debentures. Sinking funds on hand are equal to about one-third of this amount. The revenues of the colony, now in excess of £12,000 per annum, are greater than expendi- tures. INDUSTRIES. Sugar has lost its importance as a crop in Montserrat, and cotton and limes now occupy the foremost positions. Cotton was produced during 1915-16 to the amount of 279,575 pounds, as compared with 289,334 in 1913-14, the year before the war. Limes and lime juice are also exported in considerable quantities, although hurricanes have on two or more occasions greatly damaged the trees. The Mont- serrat Lime Juice Co., of Birmingham, England (see Appendix, p. 534), is the most important concern in this field operating in the island. This company has usually been a successful dividend payer. Its shares are registered on the London Stock Exchange. Papain, a medicine made from the pawpaw, is exported from Mont- serrat. This island is noted for the excellence of its pawpaws, but, owing to the perishable nature of the fruit, little market exists for their sale except to passing ships. Coconuts and bananas are also raised but not exported to any extent. There is a fairly large central cotton factory on this island, this and a lime factory being the only important industrial establishments. There are no public utilities or railroads, other than a government- owned waterworks and supply. Although, as has been indicated, the island is small and not fully developed, there are few spots in the West Indies more delightful or better suited for the growth of fruits, spices, vanilla, and other products of the Tropics. The sea-island cotton that has been pro- duced is of a most excellent variety and a future is likely to be in store for the producers. Exports of the island, barring one or two interruptions due to storms, etc., have shown a steady, consistent increase. These exports are wholly confined to agricultural products. ST. KITTS AND NEVIS. The islands of St. Kitts and Nevis lie to the northwest of Antigua. Their combined area is 115 square miles and the population about 50,000. The two islands, of which St. Kitts is considerably the larger, lie about 2 miles apart, although their chief towns, Basse Terre and Charlestown, are about 15 miles apart. Anguilla, a small island, is a dependency of St. Kitts and Nevis. Its area is about 35 square miles, and a portion of it is fertile. Both St. Kitts and Nevis are very fertile islands, although quite mountainous, and cultivation is carried on up the slopes to an altitude of more than 1,500 feet. WEST INDIES THE LEEWARD ISLANDS. 467 FUNDED DEBT. The bond and debenture issues of St. Kitts-Nevis are the following : (a) Five per cent debentures of 1886, originally issued to the amount of £3,900; sinking fund, £1,900. (&) Four and one-half per cent waterworks bonds of 1889, issued to the amount of £8,000 ; sinking fund, £3,900. (c) Four per cent inscribed stock, issued for waterworks to the amount of £8,850, and 4£ per cent public-works bonds issued to the amount of £23,000. The joint sinking fund for these issues amounts to approximately £9,300. (d) Four per cent debentures of 1891, issued to the amount of £23,500; sinking fund, £8,000 (approximately). RAILWAYS AND PUBLIC UTILITIES. There are no railways on the islands that are common carriers. In St. Kitts about 15 miles of lines exist, having been constructed to carry sugar cane to the Central Sugar Factory. The gauge of this line is 2 feet 6 inches. There are no improved methods of lighting on either island. Pre- sumably opportunity exists for the establishment of electric lighting at Basse Terre, following the termination of the war. At present, owing to the open nature of the harbor, but little street lighting is done. Basse Terre is somewhat better than the average British West Indian town and should readily support a small lighting com- pany. Just previous to the outbreak of the war in 1914 arrangements had been about completed for the establishment of this lighting sys- tem. Basse Terre has a population of 8,200. There is an excellent water supply on the island, under government supervision, as well as telephone service. INDUSTRIES. The largest and most important industrial enterprise of the island is the Central Sugar Factory, operated by the St. Kitts (Basse Terre) Central Sugar Factory (Ltd.), a British company. This is probably the best-equipped sugar factory in the British West Indies, and may truly be called a model in every sense. The plant was placed In operation in 1912, and during the five years of its existence has more than doubled its output. In 1917, 12,800 tons of sugar were turned out ; an increase over the figures for 1916. The company is now on a dividend basis, and there is every prospect of a continu- ation of large returns. Probably 70 per cent of the sugar crop of St. Kitts and a portion of the Nevis crop is ground at this Central Factory. Fifteen miles of railway, docks, and other facilities are owned. A similar institution might profitably be established in Barbados. The sugar exported from St. Kitts-Nevis during recent years has been as follows: 1901 to 1912, from 11,044 to 16,624 tons; 1913, 11,312 tons; 1914, 9,946 tons; 1915, 8,341 tons; 1916, 15,000 tons. In 1917 the exports were expected to be somewhat in excess of the 1916 fig- ures, assuring a prosperous year for the colony. The acreage under cultivation for sugar in 1916 was computed at 7,541. This was less than the 1917 total. 468 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. The cultivation of sea-island cotton has attracted considerable attention among the planters of the two islands and their dependency, Anguilla. The exports for 1915 amounted to 736,471 pounds, of which 397,567 pounds were raised in St. Kitts, 305,154 pounds in Nevis, and 33,750 pounds in Anguilla. The rainfall of St. Kitts in 1915 was 66.5 inches. The climate of the two islands may be called ideal, the death rate is astonishingly low, and the scenery and surroundings are beautiful. Nevis once had a white population of between 4,000 and 5,000 and contained many wealthy families. To-day there are less than 100 whites in the island, despite its beauty and potential agricultural wealth, and it is now only accessible by means of schooners and small sailing vessels running from Basse Terre. There are evidences that the island has seen its worst days and is likely to experience a period of steadily returning prosperity. For those liking the somewhat isolated life of the planter, there are no two more ideal spots than St. Kitts and Nevis. The annual foreign trade of St. Kitts-Nevis is approximately $2,000,000. BRITISH VIRGIN ISLANDS. The Virgin Islands are the most northerly and the smallest and least important among the Leeward Island group. Their area is about 50 square miles and population about 5,700, mostly peasant proprietors. The annual foreign trade of the group is less than $100,000. The islands offer but few opportunities for the investment of foreign capital, although there are some splendid areas adaptable for the raising of coconuts. Some cotton is produced. The islands are outside the usual route of steamers, and most of the trade is carried on in small sailing ships. The islands have no bonds out- standing and no public utilities. Savings-bank (government) de- posits amount to £300. A total of 1,225 acres of land are under cultivation. SUMMARY. The Leeward Island group has many attractions. Most of the islands are veritable paradises of natural beauty, and their soil is extremely fertile. Their only wealth, other than the timber of Dominica, is agricultural, and along agricultural lines there are cer- tainly many opportunities. The long period of stagnation and de- pression that blighted the prosperity of these islands is at an end, and there seems to be every prospect that a general period of pros- perity is at hand. MARTINIQUE. The island of Martinique, the most important of the French pos- sessions in the Western Hemisphere, lies to the south of Dominica. The island's trade is generally far larger than that of most of its neighbors, its exports being consigned principally to France. This foreign trade for 1915 amounted to $12,884,179, as compared with $8,391,473 in 1914. Martinique has outstanding two 3^ per cent loans, issued 1899 (1,460,000 francs) and 1917 (3,000,000 francs), payable through sinking fund 1924 and 1941. The loans were quoted in Paris in May, 1917, at 420 and 402 francs per 500-franc bond. A French institution known as the Banque de la Martinique fur- nishes banking facilities for the island. Its capitalization is 3,000,000 francs; reserves June 30, 1916, totaled 3,255,022 francs. A dividend of 10 per cent was paid for 1916. The rate for 1917 was 20 per "cent. The 500-franc shares of the bank were quoted at 705 francs in May, 1918. Sugar reigns supreme in Martinique, and as a result considerable wealth is being brought to the island. The value of the sugar and rum exported during the years 1913 to 1916 has been as follows: Sugar— 1913, $2,378,851; 1914, $2,328,060; 1915, $4,582,420; 1916, $5,143,103. Eum— 1913, $2,234,205; 1914, $2,598,853; 1915, $2,904,818 ; 1916, $5,522,948. A small amount of other sugar products is also exported. Increasing attention has been given of late years to the raising of cacao, coffee, vanilla, limes, and other tropical products. The lime industry has not been a real success thus far, although during 1914 and 1915 about 200,000 trees were planted. Inasmuch as limes grow prolifically in Martinique, there is every reason to believe that the industry is capable of development. The quality of coffee produced is most excellent, and the demand for the product in France has greatly exceeded the supply. During the past three or four years a considerable number of trees have been planted, although exports are still very small. Cacao is second in importance to sugar, upward of 500 metric tons being exported during 1915. The value of the cacao exported was $238,606. There are no important manufacturing industries on the island other than sugar factories. Automobiles and carriages furnish most of the necessary means of transportation throughout the island. 469 TRINIDAD AND TOBAGO. TRINIDAD. INTRODUCTION. Trinidad, the most southerly island of the West Indies, has an area of 1,859 square miles and a population of approximately 340,000. It is rough and mountainous, containing large forest areas and numerous small unnavigable streams. Port. of Spain, the capital, situated on the Gulf of Paria on the western side of the island, has a population of probably 70,000. The city is electric lighted and contains an excellent traction system. San Fernando (population about 9,500) is the second city, and there are several towns and cities of from 3,000 to 6,000 inhabitants. A very large proportion of the population is Negro and East Indian. Trinidad has a comparatively hot climate, but is. not unhealthful, although its death rate of 29 per 1,000 is somewhat higher than that of other British West Indian Islands. The exports of Trinidad for 1913 and 1914 amounted to $16,632,- 232 and $13,075,039, respectively, and the imports to $14,913,867 and $14,038,266, respectively. GOVERNMENT BONDS. The public debt of Trinidad and Tobago, as of 1915, amounted to £1,589,593, as compared with £1,041,193 in 1905. The annual charges for the debt amount to £88,800, as compared with £58,810 in 1905. The total revenue of the colony during 1915 was £934,524 and the expenditures £990,715. The per capita debt in 1916 was £3 18s. 10^d. The principal loans of Trinidad consist of: (1) £3,600 5 per cent debentures of 1874 and 1878 (original issue, £250,000) ; (2) £8,400 4 per cent debentures of 1880 and 1881 (original issue, £250,000) ; £972,593 4 per cent inscribed stock (original issue, £972,593) ; £600,000 3 per cent inscribed stock. (See " British West Indian bonds as investments," p. 480.) The £250,000 5 per cent debentures were originally issued at and above par— £150,000 in 1874 and £100,000 in 1878. A cumulative sinking fund of 1 per cent per annum has, as stated, practically re- deemed the issue. The £250,000 4 per cent bonds were issued, £150,000 in 1880, at an average of 96 per cent, and £100,000 in 1881, at 101f per cent. The cumulative sinking fund of 1 per cent per annum has, as shown, redeemed practically the entire loan. The £972,593 4 per cent inscribed stock was offered: £100,000 in 1892 at 101 or better, the price realized being approximately 102f ; £550,000 in February, 1914, at 99; £322,593 in exchange for various debentures. The bonds were quoted at 77 in January, 1918. A sink- ing fund of 1 per cent per annum, cumulative, will retire the issue 470 WEST INDIES — TRINIDAD AND TOBAGO. 471 by March 15, 1942, and the government has the right to retire the issue at 100. Interest is payable March and September 15. Of the £600,000 3 per cent inscribed stock, £400,000 was offered in July, 1897, at a price of approximately 98 per cent, the balance, £200,000, being sold in March, 1902, at an average price of slightly more than 93£. The January, 1918, price for bonds of the issue was 61. The interest is payable January and July 15, and a sinking fund of 1 per cent per annum, cumulative, will retire the issue on or before July 15, 1944. The entire issue may be redeemed at par at the option of the government on and after July 15, 1922. These securities are transferable free of stamp duties, and all pay- ments in respect to interest, etc., are made by the Crown Agents for the Colonies, 4 Millbank, Westminster, S. W., London, England. RAILWAYS. Railway enterprise in Trinidad had its beginning in the seventies, a 16-mile line from Port of Spain, the capital, to Arima having been completed in 1876. During the early eighties a branch was com- pleted from St. Joseph, 7 miles from Port of Spain, to San Fer- nando, second city in the island, 35 miles from the capital, as well as a short line from near San Fernando to Princes Town. The Arima line was later extended to Sangre Grande, on the windward side of the island, and other branches were constructed, until a length of about 100 miles has been reached. The development of the system is illustrated in the following table: Years. Mileage. Number of pas- sengers carried. Gross earnings. Net earnings. Capital invested. 1877 16 n 54} 60} 814 81* 814 88 94J 321,317 699,767 764,560 679,453 816,317 1,030,965 1,266,501 1,387,747 1,313,156 1,411,076 £18,097 43,337 53,949 51,841 67,116 82,250 89,695 107,804 100, 116 115,008 £6,540 11,079 15,734 15,198 20,860 28, 115 29,234 41,786 31,283 41,319 £175,472 533,363 602,638 602,638 681,559 881,570 910,390 932,002 932,758 934,758 1882 1887 1892 1897 1902 1907 1912 1913 1914 The gross receipts for the year 1914 were at the rate of £1,218 per mile and net earnings at the rate of £438 per mile. In the year 1915 the gross receipts totaled £132,668, and operating expenses and capital expenses were £104,111. First-class passenger fares vary from 7£ to 9 cents a mile, according to distance ; second- class rates are from 4J to 6 cents; and third class, from 2£ to 3 cents. The railway operates a number of its trains in conjunction with local steamers that give service to a number of the coastal towns and to the oil fields and the pitch lake located at La Brea. Through rail and steamer tickets are sold. Twelve passenger trains run daily in each direction to and from Port of Spain, with additional trains on certain days. % About 60 per cent of the railway's income is derived from passenger fares. PUBLIC UTILITIES. The most important public utility in Trinidad is operated by the Trinidad Electric Co. (Ltd.), a Canadian enterprise, incorporated 472 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. in 1899. This company in 1901 acquired the Trinidad Electric Light & Power Co., the Belmont Tramway Co. (Ltd.), and the Tramway Co. of Trinidad (Ltd.). The company, which is tax exempt under its charter, has an exclusive franchise for 30 years from 1902 in the city of Port of Spain and within a radius of 5 miles thereof. At the end of the 30-year period the government may purchase the prop- erties at a value to be decided on by arbitration ; otherwise the fran- chise is ipso facto extended for 20 years, and so for successive 20- year periods. The capitalization of this company consists of $1,164,000 shares of a total authorized issue of $1,200,000 (par of shares $4.80). There are also outstanding $720,000 first-mortgage 30-year gold 5 per cent bonds due 1931, and $29,000 7 per cent debenture notes. The prop- erty was carried as of December 31, 1916, at a valuation of $2,072,- 678, and there was a credit balance to profit and loss of $268,376. Dividends of 5 per cent per annum were maintained on the stock for a number of years up to July, 1915 ; no later dividends had been paid to May, 1917. The total number of passengers carried during 1916 was 3,070,733; the tramway mileage operated, 12£; passenger cars in use, 24; car mileage, 649,461; incandescent lamps, 26,433; arc lamps, 121 ; horsepower stationary motors, 171£. Total earnings for 1916 amounted to $242,657, as compared with $228,140 in 1915, $225,- 873 in 1914, $225,215 in 1913, and $224,548 in 1912. The earnings for 1916 were derived $126,199 from the traction lines, $106,788 from electric lighting and power, and the remainder mostly from the ice plant. Total operating expenses for 1916 were $137,128 ($137,675 in 1915), and net earnings were $105,529 ($90,565 in 1915 and $99,561 in 1914). The interest on bonds, $36,000, represented the total charges, a balance for dividends remaining to the amount of $69,529, as compared with $54,465 in 1915, $63,591 in 1914, and $62,346 in 1913. The head office of the company is in the Keith Building, Halifax, Nova Scotia. The telephone service in the colony is maintained by the Trinidad Consolidated Telephones (Ltd.), incorporated in 1909 in Trinidad to acquire the property of the Commercial Telephone Co. The num- ber of subscribers to the service, as of June 30, 1916, was 1,220 and the number of exchanges 8. The company maintains offices at Hali- fax, Canada, and at Port of Spain, Trinidad, most of its directorate residing in Nova Scotia. Its authorized capitalization is $300,000, of which $210,000 is outstanding. An initial dividend of 3 per cent was paid in September, 1915, this rate, having since been maintained each year. The funded debt consists of $210,000 first-mortgage 6 per cent bonds, due January 1, 1939, and subject to call at 110 on any interest date. The property is carried on the balance sheet of the company at $439,325. Gross earnings for the year ended June 30, 1916, amounted to $56,723, as compared with $53,281 in 1914-15, $48,277 in 1913-14, $44,244 in 1912-13, $41,345 in 1911-12, and $38,019 in 1911. Operating expenses and other deductions for 1915-16 were $45,327 and the profits $11,396. Dividend requirements at 3 per cent per annum are $6,300. PETROLEUM. The petroleum industry in Trinidad has attained great importance during recent years and has proved a notable factor in the prosperity WEST INDIES— TRINIDAD AND TOBAGO. 473 of the island. In 1915 the amount exported was 14,113,855 gallons, as compared with 12,153,784 gallons in 1914, 4,295,737 gallons in 1912, and 7,000,800 gallons in 1911. The existence of this petroleum has long been known in Trinidad, but the product has been developed only during recent years. The first attempt to obtain petroleum was made by a concern known as the Merrimac Co., which began opera- tions in 1857 near the famous " pitch lake." A depth of 280 feet was attained, and the well is still producing, but the discovery of the product in the United States, litigation, and other causes led to the abandonment of the property in 1859. In 1866 further attempts to obtain netroleum were made by Capt. Walter Derwent at San Fernando and Aripero Estate, Oropuche. The workers were not very familiar with the methods to be followed in drilling the bore to any considerable depth, although the level of 160 feet was reached and a small amount of oil (about 60 gallons per week) secured. This well is also being operated, though in a modest way, at the present time. In 1901 the next attempt to obtain petroleum was made, and this marked the beginning of the rapid development of the industry. The actual production during the governmental fiscal year 1915 was 36,753,931 imperial gallons. Sixty-five wells were sunk during the year, the total depth of drilling for the same period being 57,969 feet. The quality ranges from light oils, with paraffin base, to heavy asphaltic, some oils giving as high as 51 per cent spirit. Refineries have been erected and are at work producing gasoline, lubricating and fuel oils, and kerosene, while there are immense storage tanks, docks and shipping facilities, steamers plying to world markets, pipe lines, etc. A •number of wells producing upward of 30,000 barrels per day have been sunk, while in October, 1915, one well produced at the rate of 72,000 barrels per day. The Trinidad Lake Petroleum Co., one of the important producers, sank a well in May, 1913, which at the depth of 1,900 feet began to give oil at the rate of 50,000 barrels a day, though the production subsequently declined to 20,000 barrels per day. The well was not long in operation when it caught fire, causing a considerable loss to the company. After the fire had been extinguished the well pro- duced again, but only at the rate of 3,000 barrels per day. A description of various oil producers and prospects in Trinidad will be found in the Appendix. MANJACK AND ASPHALT. Practically the only mining carried on in the colony, other than the operations of the pitch lake, is for manjack, used in making varnish, for insulation, and as an asphalt. Between 1,500 and 2,000 tons of this mineral are mined annually, the value of the production not exceeding $35,000. The famous pitch lake of La Brea is a valuable asset to the colony as a revenue producer. The lake is leased to a subsidiary of the General Asphalt Co., of the United States, the concession expiring in 1930. Although it is generally believed that the supply of pitch is inexhaustible, it is stated that its probable depth is 138 to 150 feet and its lease of life at the present rate of production is estimated at more than a century. The fall of the lake has approximated 4 feet 474 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. 9 inches per 1,032,000 tons produced. The company's plant is equipped so that 80 tons of the asphalt may be shipped each hour. The royalty paid to the government is £14,000 per annum and a cer- tain amount additional for each ton shipped. The revenue received by the government from asphalt shipments amounted in 1915 to $166,330, as compared with $180,510 in 1914. Shipments of the asphalt during recent years have been as follows: 1910, 136,595 tons; 1911, 169,127 tons; 1912, 176,077 tons; 1913, 206,414 tons; 1914, 126,453 tons; 1915, 113,645 tons.. Pitch has been found and is mined to a small extent elsewhere in Trinidad. Coal has been found but has not been developed in paying quantities. AGRICULTURE. It is estimated that more than 450,000 acres of land are under culti- vation in Trinidad, of which about 50,000 acres are used for the rais- ing of sugar, 325,000 for the production of cacao, 25,000 for coco- nuts, 13,000 for rice, 5,000 for coffee, and the rest of the acreage for miscellaneous products, such as bananas, etc. The past two or three years have witnessed good crops and excellent prices, which have had much to do with the increased prosperity of the island. In addi- tion to the land under cultivation, there are further available 600,000 acres for agricultural development. Sugar growing has undergone a revival since the outbreak of the war, the production for the year 1916 exceeding all records. The year's production was 64,231 tons of sugar, of which 20,890 was ground at the Usine Ste. Madeleine, 5,340 tons at the Caroni Estate, 7,559 tons at the Tennants' Mission and Southern Estates, 6,505 tons at Waterloo Estate, and the remainder at various other estates. A total of 19,226 persons are employed in the industry, including 5,766 at the Usine Ste. Madeleine, which is the central factory of the Ste. Madeleine Sugar Co. (Ltd.). This plant is located at San Fernando and is a thoroughly up-to-date one. Approximately 17 plantations are owned by the company. During recent years the sugar crops of Trinidad have been as follows: 1907, 50.564 tons; 1908, 48,933 tons; 1909, 52,972 tons; 1910, 51,950 tons; 1911, 46,718 tons; 1912, 40,936 tons; 1913, 42,331 tons; 1914, 55,488 tons; 1915, 58,822 tons; and 1916, 64,231 tons. Approximately 90 per cent of the sugar is ex- ported, mostly to Great Britain and the United States. The govern- ment's tax on the production of sugar amounts to 4s. 4d. for every ton of 2,000 pounds; 4s. of this sum is used toward the general revenue of the colony and the balance, 4d., in aid of agriculture. There is a production tax on rum of Id. per gallon ; 91,589 gallons of this rum were exported during 1915, as compared with between 100,000 and 300,000 gallons during the 10 preceding years. The molasses production for 1915 amounted to 495,563 gallons, compared with 423,942 gallons in 1914, 339,496 gallons in 1913, and 450,068 gallons in 1912. Although Trinidad is not a world leader in field cultivation of sugar cane, it may readily be said that its sugar factories are among the very best in the West Indies. Labor, mostly East Indian, is cheap and fairly abundant. There are approximately 53 sugar estates in the_ island at the present time, and although these suffered in common with other sugar estates in the British West Indies during WEST INDIES — TRINIDAD AND TOBAGO. 475 the long period of low prices prior to the war, they are to-day yield- ing substantial returns to their owners. Cacao raising is the staple agricultural industry of the island and represents a very large investment. There are nearly 1,000 estates wholly or partly devoted to the production of cacoa. This industry •is stated to offer the best returns to investors in Trinidad, whether it be in the formation of new estates, the purchase of established and developed properties, or the investment in shares, interests, or obli- gations. Investors in cacao estates usually receive from 6 to 10 per cent and even higher on their capital outlay. This is an excellent field, but anyone entering it should be careful to have the estate valued by some thoroughly competent appraiser. Most of the large developed cacao properties in Trinidad consist of a number of small adjoining properties that have been acquired from time to time and consolidated. It is only on rare occasions that a fully developed, well-located property comes into the market. An estate of 99 acres, which may be called the standard in Trinidad, planted at 13 feet by 13 feet and with allowances for all buildings, should contain, roughly, 22,000 trees. The cost of a plantation of such dimensions, including interest at 8 per cent during the period of nonproduction, should not greatly exceed $15,000 and would be worth at full market value, when in bearing, practically double that figure. It usually takes 10 years before full returns may be earned on cacao investments. Profits are realized, however, at a much earlier date. Crown lands available for the production of cacao and other agricultural products may be obtained at £2 10s. per acre, in- cluding the cost of survey. The maximum acreage at this price is 99. When the area of the parcel exceeds 100 acres, the price must not be less than £5 per acre unless the Secretary of State for the Colonies authorizes a lower rate. The exports of cacao during the past 10 years have been as fol- lows: 1906, 246,169 hundredweight; 1907, 444,023 hundredweight; 1908, 438,724 hundredweight; 1909, 460,492 hundredweight; 1910, 516,595 hundredweight; 1911, 444,561 hundredweight; 1912, 370,765 hundredweight; 1913, 429,611 hundredweight; 1914, 516.490 hundred- weight; 1915, 482,870 hundredweight. The value of the cacao ex- ported during 1915 was $9,065,193, an increase (owing to higher prices) of $1,921,513. During 1916 and 1917 better results and prices were realized. The raising of coconuts is another important industry, 114 estates being engaged wholly or largely in their production. The record crop exported during recent years was 20,602,923 during 1911. Since that year crops have averaged about 15,000,000 nuts. The 1915 crop was valued at approximately $470,000. There is a small business in coconut oil and copra. Other important, though relatively minor, products are rubber, bananas, and coffee. The prospects in rubber planting are said to be excellent. Small amounts of Trinidad coffee have been exported. There is a small trade in limes and lime juice. Taken as a whole, it may be said that Trinidad offers, agriculturally, greater inducements to the intending settler or investor than the majority of tropical countries. In proportion to its area it is the richest of the British West Indies in natural resources. An estimate of the total value of the agricultural products of the island during 1916 would be $20,- 000,000 to $25,000,000. 476 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. TOBAGO. The island of Tobago lies to the northeast of Trinidad, in latitude 11° 9' N. and longitude 60° 12' W. The central range attains an altitude of about 1,800 feet, and in this range rise numerous small streams and watercourses. There are about 100 plantations and es- tates of importance in the island, the products being cacao, coconuts, rubber, and a small amount of sugar and cotton. A century or more ago Tobago was a great cotton producer, but the industry steadily declined in importance. The soil is said to be highly suitable for its cultivation and considerable quantities might be raised. Sugar, for a time the chief product of the island, long ago reached its high- water mark. The present high price of sugar has led to a slight in- crease in the acreage of the crop and may lead to a general revival of sugar planting. Increasing attention has been given of late to the raising of live stock, and a few cattle are being exported. Nut- megs are also being grown, Tobago being particularly suited for their growth. Tobago is now a dependency of its neighbor Trinidad and no longer has a separate government. The population does not exceed 25,000. Scarborough, with about 800 inhabitants, located on Rockley Bay, is the capital and principal town. About two-thirds of the island re- mains uncultivated, and there are extensive forest areas containing fine specimens of hardwood timbers. There is no known mineral wealth. As is the case in most of the smaller islands of the West Indies, Tobago has no manufacturing industries, and opportunities are almost wholly confined to those existing in the agricultural industry. The laws are liberal and there are considerable areas of Crown lands available for settlement. The field, however, offers little inducement for the extensive investment of capital, though estates requiring moderate investment would doubtless yield good returns. The island has directly no bonded debt, but shares in the responsi- bilities of the colony of Trinidad. There are no railways and prac- tically no public utilities. Transportation facilities are furnished by coastal steamers that ply between places of importance on this island and Trinidad. Good roads to the interior do not exist. THE WINDWARD ISLANDS. ST. LUCIA. St. Lucia, one of the Windward Island group, lies to the north- west of Barbados. Its area is 233 square miles and its population approximately 50,000. Castries, the chief town, has a population of 6,000 and is located on a beautiful landlocked harbor having sufficient depth of water to accommodate very large vessels. Steamers may dock here, and for this reason the port has become important as a coaling station. The town itself is not imposing. It has few im- provements other than a good water system and its population is nearly all black. PUBLIC DEBT. The bonded debt of St. Lucia is not large. The principal issues consist of approximately £85,479 four per cent inscribed stock, due 1919-1944 (interest February and August) , and £46,900 four and one- half per cent debentures which are retirable through a sinking fund. Interest is payable on this latter issue May and November, and it is listed on the London Stock Exchange. A further description of this issue is given under the general heading " British West Indian bonds as investments " (p. 480). There is a small debt in addition to the 4 per cent inscribed stock and 4-J per cent debenture loan, largely in- curred to meet war expenses. Castries has outstanding approxi- mately £2,510 in loansi Public revenues during 1916 amounted to approximately £65,000, a figure slightly in excess of expenditures. RAILWAYS AND PUBLIC UTILITIES. There are no railways on the island of St. Lucia, nor is there room for any under present conditions. Public-utility development is lim- ited to 180 to 200 miles of telephone, a good water system, and a very substantial public market at Castries. That town is lighted by paraffin, and there is hardly an opportunity at present for electric lighting. The field is a very small one. INDUSTRIES. There are no manufacturing industries on the island other than a government lime-juice factory and a few sugar mills. There is little opportunity for development along these lines. The coaling of ships forms to-day the principal industry of Cas- tries and furnishes a livelihood to a large portion of the population. During the normal year 1913, 535 steamers were coaled at the port, taking on 117,531 tons of coal. Approximately two-thirds of the available agricultural areas of St. Lucia are to-day under cultivation. Sugar and cacao share honors. Of the former, 4,628 tons were exported in 1915, as well as 17,000 gallons of molasses and 26,054 gallons of rum, these being valued at £89,466, as compared with £46,279 in 1914, £67,679 in 1913, 477 478 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. £56,000 in 1912, and £56,004 in 1911. The 1916 and 1917 crops were likewise very satisfactory and produced increased revenues to the owners of the estates. St. Lucia is very good sugar territory, and the revival in the industry is pronounced. Cacao is second in importance among the agricultural products and has in recent years been planted in increased quantities. In 1915 a total of 18,478 hundredweight of cacao was produced, yielding £51,495. This was a slight increase over the crop for the year 1914. Limes are being raised in increasing quantities, the 1915 crop totaling 21,363 barrels as compared with 12,765 barrels in 1914. The value of the 1915 crop was £7,312. It is claimed that 50,000 barrels and upward should easily be produced, as the soil and climate of the island are highly suitable for the growth of limes. Coconuts head the minor crops, and the production is showing a steady annual increase. In 1911 the exports amounted to 20,280 nuts, in 1912 to 43,164 nuts, in 1913 to 80,097 nuts; in 1914, owing to the war, the exports fell off to 53,638 and in 1915 increased to 67,206. In addition, copra is shipped in small quantities. The high price of ship tonnage affects the industry. Attention is also being directed to the bay trees, and it is claimed that a most excellent variety of bay rum may be produced. It is expected that this will prove a source of revenue to the island. Other minor crops are raised in moderate amounts. The island, though mountainous, is rich agricul- turally. GRENADA. The island of Grenada lies midway between Trinidad and St. Vincent at about latitude 12° N. Its area is 133 square miles and the population about 68,000. The annual foreign trade amounts to about $3,000,000. St. George,, the capital, has a population of about 5,500 and is beautifully located on a harbor of similar name. Although mountainous (the highest elevation is 2,750 feet), the island is in- tensely cultivated and extremely fertile. There are several rivers, a lake, and numerous springs. FUNDED DEBT. The debt of Grenada is discussed in the section "British West Indian bonds as investments " (see p. 480) . The principal and only important issue of the colony consists of £123,670 4 per cent inscribed stock, retireable by smking fund between the years 1917 and 1942. These bonds sold at a high premium before the outbreak of the war, closing July 27, 1914, at 99. In January, 1918, they were quoted at 77 per cent. PUBLIC UTILITIES. Tenders have been asked from time to time from the government for the installation of a lighting system in St. George and its suburbs. There is good water in the island. No railways exist, a coastal steamer operated by the Royal Mail Steam Packet Co. furnishing the necessary means of transportation to the various towns of the island, most of which are located along the coast. INDUSTRIES. Grenada is preeminently a producer of cacao, nutmegs, and other spices, ranking next to Trinidad among the British West Indies as WEST INDIES THE WINDWABD ISLANDS. 479 a producer of cacao. It is said that in proportion to area the island is the greatest cacao producer in the world. Exports of cacao in 1916 amounted to 77,029 bags, as compared with 62,166 bags in 1915. The amount of spices (nutmegs and mace) exported during the fiscal year 1915 was 1,674,286 pounds, as compared with 1,372,940 pounds in 1914 and 909,280 pounds in 1911. The value of the 1915 crop exported was £37,284. Cotton to the value of £10,740 was also exported. ST. VINCENT. St. Vincent has no public debt outstanding. There are no rail- ways in the island, nor are there any industries in which the invest- ing public might be interested. The island is fertile and splendidly suited for cotton raising, as well as for the production of arrowroot. Cacao is raised. Increasing attention has been given of late to the growing of coconuts, and companies with fair amounts of capital would probably make money in this field. The island sadly lacks fertilizers, and there would perhaps be room for a plant equipped for the manufacture of cottonseed fertilizers. St. Vincent has a population of approximately 45,000. BRITISH WEST INDIAN BONDS AS INVESTMENTS. In British West Indian colonial bonds and inscribed stock is to be found a class of "near at home" securities worthy of attention. The West Indian possessions of Great Britain, many of them long dormant, are feeling the benefits of the present boom in sugar. Plantations have been cleared and put in order, and more progress is to be noted than has existed at any time during the past quarter century. British Guiana, Great Britain's only South American pos- session, has likewise felt the effects of the rise in sugar. The securities of i -e British colonies are free from all stamp taxes, and in normal times sell at very high figures. At present prices, in view of their short maturities, their yield in several instances is well above 5 per cent, and in the event of their being called for payment by sinking fund the yield and profit will be much larger. The present low prices should be noted : Securities. When redeem- able. Price on July 27, 1914. 1917 price. Decline. Antigua 4 per cent Barbados 3$ per cent British Guiana 4 per cent British Guiana 3 per cent Grenada 4 per cent Jamaica 4 per cent Jamaica 3$ per cent Jamaica 3 per cent St. Lucia 4 per cent Trinidad 4 per cent Trinidad 3 per cent 1919-1944 1925-1942 1935 1923-1945 1917-1942 1934 1919-1949 1922-1944 1919-1944 1917-1942 1922-1944 78 99 100 88 79 98 101 78 24 20 17 17 22 23 26 17 21 24 17 The 4 per cent bonds of the island of Antigua were first offered for public subscription in the year 1894, the price being 103^. The issue is for £100,000 ($486,650), which is practically the entire public debt of the island. A sinking fund will purchase" bonds up to par from 1919 to 1944. The 4 per cent and 3 per cent loans of the colony of British Guiana are outstanding to the amounts of £194,500 and £250,000 ($946,535 and $1,216,625), respectively. These issues and other securities to an aggregate amount of about £100,000 represent the total debt of the colony. The 4 per cent loan was originally issued at about 98, while the 3 per cent issue was brought out part at 96J and part at 93. Both issues are provided with sinking funds. The Barbados 3$ per cent loan is for £375,000 ($1,824,940). The original offering price of this issue was 102f per cent, which reflects the excellent credit of this island. Grenada's 4 per cent loan is outstanding to the amount of £123,000 ($598,580), this representing practically the entire debt of the colony. 480 WEST INDIES BRITISH WEST INDIAN BONDS AS INVESTMENTS. 481 ' The issue was originally brought out at about 101 and at one time sold as high as 111^. Conditions on this island are said to be much better than for some time past, and it should be able to take care of its obligations without assistance from the mother country. Sinking fund began operation in 1917 and will redeem bonds prior to 1943. Grenada has a population of about 68,000. The Jamaica loans are outstanding as follows: 4 per cent, £1,- 099,048 ($5,348,515) ; 3£ per cent, £1,493,600 ($7,268,605) ; 3 per cent, £200,000 ($973,300). The 4 per cent loan was originally subscribed for at prices averaging from 103 to 103|, and is being purchased from time to time for a sinking fund, which will keep the issue alive until its final retirement in 1934. The 3| per cent loan was issued in 1900 to acquire the Jamaica Railway, the bonds being taken by the com- pany's first-mortgage bondholders. St. Lucia is enjoying prosperity now that a British West Indian coaling station has been established there. The colony's population slightly exceeds 50,000. The 4 per cent bond issue is for £85,479 ($415,985). It was brought out at 102 and higher. St. Lucia has also a small 4£ per cent debenture issue (£49,100, or $238,945) out- standing; these debentures may be purchased at about 90-91. They are being redeemed by a sinking fund, which buys the debentures up to par. Trinidad, with its oil boom and increased production of sugar, is in excellent financial condition. The island, with its dependency, To- bago, has a population of approximately 360,000. Large revenues are received through royalties on asphalt, sale of Crown lands (largely to oil companies), etc. Its 4 per cent sinking fund loan (£972,500, or $4,732,670) sold orginally at 99 to 103|. The 3 per cent sinking fund loan (£600,000, or $2,919,900) was brought out at 98. The loans have been issued for the construction of railways, roads, harbor works, and other public works. British Honduras, England's Central American possession, has outstanding three principal loans, as follows: (1) £29,000 4| per cent debentures of 1918-23 (sinking fund 2 per cent per annum) ; (2) £43,100 4 per cent 10-year debentures due 1921, issued privately in 1911 (original issue £160.000; balance converted into 4 per cent inscribed stock) ; (3) £116,900 4 per cent inscribed stock due 1941-71. The Bahamas group has outstanding two small external loans, one bearing interest at 4£ per cent (£35,000 issued; £14,500 outstanding) and one at 4 per cent (£15,000 issued and outstanding). Naturally no wide market exists for these small issues. 63018°— 18—— 31 APPENDIXES. Appendix A.— SOUTH AMERICA. The information contained in this and the following appendixes is designed to supplement the facts and illustrate the conclusions pre- sented in the text of the report proper. Data are here given with regard to numerous enterprises, most of which a^e not discussed (to any considerable extent, at least) in the preceding pages. There are brief accounts of the companies' activities ; followed, in general, by- statistics of capitalization, dividends, and income, and the names of the principal officials. Quotations of securities are given in some places. It is hoped that persons interested in investments and the development of Latin- American opportunities may obtain from these statements an idea of the results that have followed the utilization of capital in certain fairly typical instances. ARGENTINA. ALTO PARANA DEVELOPMENT CO. (LTD.). Registered 1912. Acquired the 600,000 pesos shares (Argentine gold) of the Sociedad Anonima Companla de Maderas del Alto Parana: Approximately 621,000 acres of hardwood forests and 57,500 acres of pine forests in the State of Parana, Brazil, are owned, as well as a sawmill at Corrientes, Argentina. The cutting of timber is not being actively carried on at present, owing to ab- normal war conditions; the only business that is being actively prosecuted "is in connection with wild and cultivated yerba mate (Paraguayan tea). Capitalization. — £330,000 6 per cent and participation noncumulative prefer- ence shares and £330,000 ordinary shares (par £1) ; no dividends; £300,000 of the ordinary shares were issued to acquire the shares of the Argentine com- pany. Income account. — Year 1914-15: Alto Parana Development Co. Interest re- ceived (net), £851; London expenses since incorporation, j£l,628. Argentine company — From interest, discount, commissions, and natural yerba sales, £1,758; expenses, £10,637; debit bailee to profit and loss, £33,383; losses in previous accounts in suspense, £19,167. Directors.— James Railton, chairman ; Henry J. Bell, Hon. Eric B. Butler- Henderson, A. G. Gumpert, Stephen H. M. Killik ; secretary, George R. Cable, River Plate House, London, B. C. Argentine company : H. H. Leng, president ; O. Lockwood, director. Preference shares quoted in London. ANGLO-ARGENTINE TRAMWAYS CO. (LTD.). Registered 1877. Reconstructed and reregistered 1887. This company operates the largest and most important tramway system in Buenos Aires and, incidentally, in South America. Prior to 1900 the lines were operated by horse system ; in 1903 the work of electrification was com- pleted. Subsequently the Buenos Aires Tramways Co. (Ltd.), Buenos Aires & Belgrano Electric Tramways Co. (Ltd.), Buenos Aires Grand National Tram- ways Co. (Ltd.), etc., were acquired. In 1910 this company obtained from the municipality of Buenos Aires a concession for the construction of about 20 miles of subway. The first section of this subway (6 miles) was opened in December, 1913, and additional mileage completed in 1914. Owing to the 483 484 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. outbreak of the war the completion of additional subway mileage has been delayed. The municipality receives 6 per cent of the gross receipts of the sub- way as per terms of the concession, which expires March 18, 1990. On this date the entire property reverts to the municipality without compensation. Earnings. — The growth and expansion of this system is indicated by the following table: Years. Receipts. Expendi- tures. Passengers carried. 1902 £254,582 720,488 1,262,759 2,631,836 2,778,302 2,963,191 2,850,995 2,709,615 £191, 136 464,872 790,687 1,723,928 1,824,021 1,969,161 1,880,996 1,786,740 27,419,188 1905 82,442,410 142,939,805 299,154,83* 316,260,097 1908... 1911 1912 1913 , 342,140,422 322,015,254 316,982,440 1914 On December 31, 1915, 2,731 cars were owned, and approximately 365 miles of main line and 619 miles of track were operated in 1915. Income account. — The income account for the year ended December 31, 1915, resulted as follows : Gross receipts, £2,709,616 ; operating expenses and taxes, £1,786,740; net receipts, £922,876; total net income, £986,513; interest, rental, and sinking fund, £586,642 ; first preference dividend, 54 per cent, £176,000 ; second preference dividend, 5J per cent, £137,500 ; balance carried to balance sheet, £2,289. Capitalization. — (a) Debenture stocks, £12,007,141 outstanding: 4 per cent debenture stock, £4,465,674 authorized, £4,296,376 outstanding, largely issued in exchange for debentures of absorbed corporations ; redeemable by sinking fund at not more than 102, entire issue to be redeemed by 1968; subject to call at 102 on six months' notice ; £169,298 redeemed prior to Decem- ber 31, 1915 ; interest payable June 30 and December 31. 4i per cent debenture stock, £1,733,380 authorized, £1,710,765 outstanding, balance redeemed ; due January 1, 1985 ; ranks subject to 4 per cent debenture stock. 5 per cent debenture stock, £6,000,000 authorized and outstanding; sinking fund commences 1916, drawings at par ; subject to above issues. (6) Stocks, £8,950.000 outstanding : 54 per cent cumulative first preference, £4,000,000 authorized, £3,200,000 out- standing ; par £5 ; dividends June and December. 5i per cent cumulative second preference shares, £3,000,000 authorized, £2,400,- 000 outstanding ; par £5 ; dividends June and December. Ordinary shares, £4,000,QOO authorized, £3,250,000 outstanding; par £5. Above shares, except ordinary shares, are listed on the London Stock Ex- change. Cost of concession and other property, construction, and equipment to Decem- ber 31, 1915, £19,384,972. Profit and loss credit carried forward, £94,120. Dividends on ordinary shares. — 1907, 8 per cent ; 1908, 7J per cent ; 1909, 6 per cent ; 1910 and 1911, 7| per cent ; 1912, 8i per cent ; 1913, 6| per cent ; 1914, 1915, and 1916, none. Directors. — J. B. Concanon, chairman ; L. Cassel, G. Cicogna, H. F. Gunning, W. F. Hamilton, K. C. J. Heaton, D. Heineman, Baron L. Janssen, G. De Laveleye, C. M. Rose, C. H. Sanford, G. A. Touche, M. P. Committee in Buenos Aires : Samuel Hale Pearson, chairman ; Hugh Wilson ; general manager, G. Pedriali. Office : Greslian House, London, E. C. ARGENTINE IRON & STEEL CO. (LTD.). Registered 1912. Acquired the brass, iron, and steel castings business of Pedro Vasena & Sons, of Buenos Aires ; purchase price £953,283, £453,283 cash, balance ordinary shares ; ordinary-share capital later reduced. Capitalization. — February 28, 1915 (latest figures obtainable) : Preference shares (par £1, entitled to 6 per cent per annum cumulative and 20 per cent of profits), £500,000 authorized, £500,000 outstanding; ordinary shares (par 12s., 99,770 unissued shares par £1), £459,908 authorized, £360,138 outstanding'; APPENDIXES. 485 6 per cent first-mortgage debentures, £350,000 authorized, £321,300 outstanding (balance redeemable through sinking fund; interest on debentures March and September) ; total, £1,309,908 authorized, £1,181,438 outstanding. Income account. — Tear ended February 28, 1915: Profit on trading, £102,192 (£63,485 in 1913-14 and £130,363 in 1912-13) ; surplus, £57,171 (£19,776 in 1913- 14 and £67,360 in 1912-13). Of the surplus for 1914-15, £27,171 was transferred to reserve for contingencies. Stock on hand and in transit, £448,178. The company has reduced its floating debt from £243,159 as of February 28, 1914, to £105,816 as of February 28, 1915. Since the latter date a further reduc- tion has taken place. Dividends of 6 per cent per annum are being paid on the preference shares. Directors. — Sefior Don Pedro Vasena, chairman ; Charles Lock, vice chair- man ; Baron Emile Beaumont d'Erlanger, James C. Dunn, John C. Gibson, Baron Hubert de PfefEel (Paris). Offices: Buenos Aires, Argentina; 8 Crosby Square, London, E. C. ; and Paris, France. ARGENTINE LAND & INVESTMENT CO. (LTD.). Incorporated 1870 as the Central Argentine Land Co., to acquire the lands ceded by the Government of Argentina to the Central Argentine Railway. Reregistered 1888 under present title. Properties are owned at Las Veras, Province of Cordoba, and in the Provinces of Santa Fe and Chubut (leased to Argentine Southern Land Co.). Town and "camp lands are owned, the camp lands (original concession) unsold June 30, 1915, amounting to 83,898 acres, of which 79,841 acres were located in the Province of Cordoba and 4,057 acres in Santa Fe. Lauds are rented, sold, colonized, stocked with cattle, etc. The original concession is carried at a net value of £70,916 ; other properties at cost, £117,135; land installments unmatured and colonists' bal- ances outstanding, £191,743; cash, £38,372; mortgage loans, £212,575; invest- ments, £19,998. CAPITALIZATION, JUNE 30, 1915. Securities. Authorized. Outstand- ing. Preference shares, 5 per cent cumulative (par £4) a Income stock, 4 per cent. . * Ordinary shares (par £1) c Debenture stock, 4 per cent (interest quarterly, February) £520,000 6133,476 130,000 100,000 £435, 840 6 55,174 c 52, 234 49,325 a After income stock issued is fully redeemed these shares will be entitled to 5 per cent per annum cumu- lative (as at present); when the ordinary shares have received 10 per cent both issues will share pro rata for further dividends. ' Original issue £133, 476 in 1906 to fund 30| per cent arrears in preference dividends; balance retired through sinking fund. « 10s. paid in; balance uncalled. i Original issue £63, 780; balance retired through sinking fund. INCOME ACCOUNTS. • Items. Year ended June 30 — 1914 1915 £41,592 11,225 18,205 £25,482 33,043 20, 016 71,449 18,969 78,750 31,843 52,480 385 46 907 373 52,095 46, 534 Of the surplus for 1914-15, £20,000 was appropriated for reserves. After divi- dend payments £18,840 was carried forward. Reserves June 30, 1915, £62,208. Dividends on ordinary shares, 4911 to 1916, 5 per cent per annum. 486 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Directors.— Charles Darbyshire, chairman ; Gordon H. Brown, F. O. im Thurn, Cecil Mallet, Sir William L. Young ; secretary, R. J. Parker, Palmerston House, Old Broad Street, London, E. C. General manager: Donald Fraser, Rosario, Argentina. ARGENTINE METALS (LTD.). Registered 1914. Owns wolfram mines, located at Pisco Yacu, Province of San Luis, Argentina. Further information not available. Capitalisation. — £10,000 10 per cent cumulative preference, £15,000 ordinary, and £5,000 deferred shares, par £1. Secretary : C. Tomkins, 101 Leadenhall Street, London, E. C. ARGENTINE NORTHERN LAND COMPANY (LTD.). Registered 1908 to acquire properties of land from a company owning some 1,970 acres situated along the route of the section of the Cordoba Central Railway between Buenos Aires and Cordoba. Capitalization. — Authorized, £500,000 shares, par £1; outstanding, £329,487, Report for 1915 states that the net profit for the year amounts to £3,731, of which £1,100 has been placed to reserve to protect doubtful debts, leaving £2,631, as compared with £1,003 for the previous year. The profit for the year reduces the amount standing to debit of profit and loss to £7,630. The value of the land sales effected, after deducting expenses, exceeds the cost of the land sold by £7,837. Of the total area of the company's lands purchased from time to time, 2,139,819 meters have been sold or utilized for public purposes, leaving 9,304,940 meters to be disposed of. In view of this holding the direc- tors do not consider it desirable at present to make further purchases, and con- sequently, as the capital released by the sale of lands is received, the funds are being employed in London in the purchase of Treasury bills. The com- pany has already invested in this manner £8,000. Directors. — G. W. Hoghton, chairman ; L. Clow, F. Holt ; secretary, J. Heath Office : 3 St. Helen's Place, London, E. C. ARGENTINE TIMBER & ESTATES CO. (LTD.). This company was incorporated in 1915 to take over the assets of a company with a similar title, consisting of a property of 193 square miles situated in the Province of Jujuy, Argentine Republic, mostly covered with quebracho for- ests. Sawmills, a tanning-extract factory, cattle, and ranching properties are also owned. About 300 men were at work on the estate in 1915. Quebracho extract is to be delivered to the Forestal Land & Timber Co. at the rate of ap- proximately 2,500 tons per year. Capitalization. — £15,350 ordinary shares (par Is.) ; deferred shares, £21,342 (par Is.). The ordinary shares will be entitled to 90 per cent of all profits. Approximately £90,000 6 per cent debentures have been issued, including £75,000 to the holders of debentures of former company. Interest payments began May 1, 1917. No accounts have been published thus far. Directors. — G. W. Hoghton, chairman ; L. Clow, C. H. Thomas ; secretary, E. H. Orchard. Address: 3 St. Helen's Place, London, E. C. Manager: J< B, Leahy. ARGENTINE TOBACCO CO. (LTD.). Incorporated 1911. Acquired during 1911 and 1912, 19 tobacco, cigar, and cigarette manufacturing companies. CAPITALIZATION, OCTOBER 31, 1915. Securities. Authorized. Outstand- ing. Preference shares (par £1), entitled to a fixed cumulative dividend of 6 per cent £934,919 934,919 93,492 o650,000 £834,919 845,831 83,492 o456,800 Ordinary shares (par 10s.), entitled to a dividend of "6 per cent per annum and Deferred shares (par Is . ), entitled to 25 per cent of the surplus divisible profits 7 per cent first debentures, redeemable by 1920, at 105 per cent 2,613,330 2, 221, 142 o Balance redeemed by sinking funds. APPENDIXES. INCOME ACCOUNTS. 487 Items. Year ended October 31- 1913 1914 1915 Profit on trading General charges in Argentina Balance Total, including other income Profit after interest and other charges Depreciation, reserves, reduction of goodwill, etc Bond sinking fund £389,891 241,239 148,652 149, 106 105,413 4,186 100,000 £386,668 245,060 141,608 141,713 103, 293 a 160, 860 Deferred. £374, 509 167,238 207,271 208, 398 156,594 156, 594 Deferred. a Includes £57,567 transferred from reserve. Directors. — In Europe : Baron Emile B. d'Erlanger, chairman ; John O. Gibson, deputy chairman ; Baron Frederic A. d'Erlanger, Pierre Girod, George Kitchen, and Baron Frederic Portalis, directors. In Buenos Aires: Leon Duran, presi- dent ; Victor Negri, vice president ; Arturo Viader, general manager ; Herman Hentsch, H. H. Long, Agustin Leon, M. Mendez de Andes, Oswaldo Testoni ; secretary, T. H. Darton. Offices: 8 Crosby Square, London, E. O. BUENOS AIRES & PACIFIC RAILWAY. The .report of the general manager states that the capital of the system administered by the Buenos Aires & Pacific Railway amounts, according to the books, to $250,607,000 gold. In the year 1916 the net profits amounted to $9,638,468 gold, being an in- terest return of 3.85 per cent upon the capital invested. * * * But the small interest yield is not confined to the year 1916. The situation has been the same for several years past. The scale of yields, over a period of six years, has been as follows : In 1911, 4.58 per cent ; in 1912, 4.37 per cent ; in 1913, 4.25 per cent ; in 1914, 3.23 per cent ; in 1915, 4.01 per cent ; and in 1916, 3.85 per cent. The figures of the capital, the gross receipts, the working expenses, and the profits from 1910 onward, are shown in the following table: Years. Capital. Gross receipts. Working expenses. Profit. 1910 , $209,440,812 218,157,860 225,399,438 234,219,544 238,093,900 249,875,120 250,607,331 $23,298,582 24,647,746 25,417,396 27,138,807 22,014,620 24,378,684 24,393,584 $13,344,355 14,649,922 16,547,384 17, 172, 178 14,316,756 14,367,571 14,755,116 $9,954,227 9,997,824 9,870,012 9, 966, 629 1911 1912 1913 r 1914 7,697,864 10,011,113 9,638,468 1915 1916 The preceding table shows that from the year 1910 up to 1916 the figures of net profits have been maintained almost without variation, there having been no appreciable progress from one year to another, while in 1916 the amount of such profits is seen to have been less by $316,000 gold than that obtained in 1910, notwithstanding that from that year to the present time the capital of the com- pany has increased by $40,000,000 gold and the length of line worked by 800 kilometers (about 500 miles). In the economic year 1914-15 the cost of the fuel used by the company was $2,225,500 gold. In 1915-16 the figure rose to $2,653,367 gold, and during the year ended June 30, 1917, it had increased to $3,276,307 gold. The cost of fuel per ton, after making the reductions necessary to arrive at its equivalence to coal, was $9.67 gold in 1914-15, $10.80 gold in 1915-16, and $12.29 gold in 1916- 17. The cost of fuel per train kilometer, which in the first of the years above mentioned was $0.2035 gold, rose to $0.2776 iu 1916-17. 488 INVESTMENTS IN LATIN AMEEICA AND BRITISH WEST INDIES. BUENOS AIRES SOUTHERN DOCK CO. Registered 1898, to construct docks on the banks of the Riachuelo, Buenos Aires. The first section was completed in 1908 and the second in 1914. Valuable lands are owned. The concession is perpetual. CAPITALIZATION. Securities. Authorized. Outstand- ing. Shares (par £10) 4 per cent debenture sto:k Total £1,000,000 1,600,000 £700,000 ■ 1,600,000 2,600,000 2,300,000 o Issued to Buenos Aires Great Southern Railway for advances made by the latter. INCOME ACCOUNTS. Years. Gross receipts. Net work- ing receipts. Tons handled. 1905-6 £32, 105 87, 712 98,241 117,819 114,556 79,429 £11, 173 48,587 52, 3 3 55,355 61,212 39.U46 474,792 852, 739 876,875 1,122,955 1,000,906 810,707 1910 11 1911 12 1912-13 1913 14 1914 15 Note.— 1914 15 net revenue, £39,046; net income, £39,939; interest, £64,000; loss, £24,061. No divi- dends paid. CACHEUTA OIL SYNDICATE (LTD.). Registered 1912. Acquired options to purchase upward of 70,000 acres of petroleum-bearing lands located at Cacheuta, Province of Mendoza, Argentine Republic. Capitalization. — £36,600 shares (par £1) ; total authorized, £50.000. Deben- tures lu the amount of £1,500 are also outstanding. Income accounts are not made public. Directors. — W. E. H. Firman, G. C. Duffies ; secretary, B. M. Allan ; 34 Bish- opsgate, London, E. G. CAPILLITAS CONSOLIDATED MINES (LTD.). Registered 1909 as a reconstruction of the Capillitas Copper Co. (Ltd.). Owns the Capillitas and Atajo groups of mines, together with smelters. The mines (area about 125,000 acres) are located in the Province of Catamarca, Argentine Republic. The ore in sight is estimated at 100,000 tons. Work has been temporarily suspended. Capitalization. — £600.000 shares authorized (par £1) ; £410,660 outstanding. Secretary: G. Hillsdon, 110 Cannon Street, London, E. C. CATALINAS WAREHOUSES & MOLE CO (LTD.). Registered 1897. Has issued its own securities against the debentures and shares of the Catalinas Warehouses & Mole Co., of Buenos Aires. A total of 375,322 out of 383,994 ordinary shares of the Buenos Aires company have been exchanged for the British company's securities. More than 40 warehouses are owned. APPENDIXES. CAPITALIZATION, DEC. 31, 1915. 489 Securities. Authorized. Issued. Outstand- ing. Ordinary shares (par £2) 4 per cent preference shares (par £5) 4 per cent mortgage debenture bonds (par £60) Total £770,000 650,000 700,000 £750, 644 636, 350 489, 500 £750, 644 636,350 ol51,900 2,120,000 1,876,494 1,538,894 a Balance redeemed. Note.— The ordinary and preference stocks share pro rata as to dividends after 4 per cent per annum Jaas been paid on each class. DIVIDENDS. 1906 to 1909 1911 and 1912 1914 and 1915 Preference. Ordinary . . Per cent. 4 Per cent. 4 2 Per cent. 4 4 Per cent. 4 a2 a Free from income tax. INCOME ACCOUNTS (CALENDAR YEARS). 1912 1913 1914 Gross receipts Working expenses Net receipts Tonnage handled . £226,309 £143,727 £82,582 541,588 £196,467 £129, 541 £66,926 486,955 £104,643 £79,115 £25, 528 211,847 £59,608 £54,656 £4,952 152,760 To the net receipts for 1915 there was added : Interest, etc., £1,264 ; balance from 1914, £16,177; total, £22,394. Charges amounted to £9,140, leaving a surplus of £13,254. Cash on hand December 31, 1915, £34,926; stores, £6,891; other current assets, including £15,566 debtors for surplus lands sold (due 1916-1922), £49,608; sundry creditors, £14,261; other current liabilities, £3,593; balance to net revenue account (surplus), £13,255. Directors. — Frank Henderson, chairman ; Charles W. Parish, R. B. Polhill- Drabble, T. Penn Gaskell, F. G. Fighiera (all of Great Britain) ; H. H. Leng, Charles Lockwood, Dr. Juan Mendieta (Buenos Aires). General manager, D. Dallas, Buenos Aires. Secretary, G. Brown, Finsbury Pavement House, London, E. C. CITY OF BUENOS AIRES MARKET CO. (LTD.). used Incorporated 1900 to acquire a property of about 12,300 square meters, as a market for sale of meat, poultry, game, fish, vegetables, fruit, etc. Capitalization. — Two million pesos (Argentine paper) shares; also £60,000 (approximately) 6 per cent debentures (of an original issue of £120,000, dated 1900). The debentures were offered for sale at 98i per cent in 1905 by the Anglo-South American Bank, and are- redeemable at par prior to July 1, 1924, by semiannual drawings (June and December). Dividends. — Years ended August 5 : l'907-8, 12 per cent ; 1908-9, 14 per cent ; 1909-10 and 1910-11, 17 per cent ; 1911-12, 18 per cent ; 1912-13 to 1914-15, 21 per cent. Office : 2374 Calle Alsina, Buenos Aires. CITY OF BUENOS AIRES TRAMWAYS CO. (LTD.). Registered 1869 to construct a horse tramway system in the city of Buenos Aires. The system was later changed to electric traction. In 1904-5 the prop- erty was leased "(from Jan. 1, 1905) to the Anglo- Argentine Tramways Co. 490 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. (Ltd.)., until January 1, 1985. The rental amounts to £70,660 per annum, this payment being guaranteed. This annuity is equal to full interest on the de- benture stock and 5 per cent dividend on the shares (see following). Capitalization. — f 1,240,000 shares (par £5) ; £174,000 4 per cent debenture stock due 1985, interest January and July. The debenture stock is secured by a first charge on the whole of the assets. Directors. — J. Heaton, chairman ; F. C. Crawley, secretary ; B. H. Woods. Office : 1 Great Winchester Street, London, E. C. CONSOLIDATED WATER WORKS CO. OF ROSARIO (LTD.). This company was incorporated in 1896 to take over the properties of the Rosario Waterworks Co. (Ltd.). The concession to the company expires in 1958, at which time the properties revert to the municipality. The municipality may purchase the undertaking at an earlier date under certain conditions. The company has the exclusive privilege to supply Rosario with water. The total number of services as of December 31, 1915, was 23,790, as compared with 12,609 services as of December 31, 1905. CAPITALIZATION DEC. 31, 1915. Securities. Authorized and out- standing. Preference shares. 6 per cent noncumulative (par £ 10) Ordinary shares (par £10) 4 per cent debenture stock due 1930 (interest January and July) 5 per cent second debenture stock due 1940 (interest January and July) Total £140,000 300,000 »184,583 100,000 724,583 a Original issue £200,000; balance redeemed through sinking fund. INCOME ACCOUNTS. Items. 1914 1915 £125,475 50,339 £124,403 50,628 75, 136 73,785 After carrying forward from the previous year the sum of £13,728 and adding interest, and after providing for the fixed charges, such as interest, income tax, reserve fund (£12,000), depreciation, etc., for the year ended December 31, 1915, there remained the sum of £47,378. Of this amount, £8,400 was paid as a dividend on the preference shares (6 per cent) and £24,000 was paid on the ordinary shares (8 per cent). After providing £2,000 for the staff provident fund, £12,979 was carried forward to 1916. The 8 per cent dividend rate on the ordinary stock has been maintained for some years. Current assets as of December 31, 1915, were largely in excess of current liabilities. Directors. — December 31, 1915: W. T. Western, chairman; James Anderson, W. Galwey, Ross Pinsent, F. C. im Thurn ; secretary, G. Proctor, 52 Moorga'te Street, London, E. C. CORDOBA LIGHT AND POWER CO. Incorporated in Maine, U. S. A., to produce and distribute electricity for light, etc., in the Province of Cordoba, Argentina. Concession expires 1948. Capitalization. —$500,000 12 per cent cumulative preferred stock and $800,000 ordinary stock. All stock owned by Cordoba Light, Power & Traction Co (Ltd.). APPENDIXES. 491 DEVELOPMENT CO. OF SANTA FE (LTD.). Registered 1909. Acquired from the Santa Pe Land Co. (Ltd.) 416,798 acres of land situated in the Province of Santa Pe. The cost of this land was £242,144; buildings, fencings, clearing, etc., cost £23,275, and live stock cost (to June 30, 1915) £46,264 (actual value £58,700). The company's principal business is the raising of cattle, of which 12,606 head were owned as of June 30, 1915, as compared with 6,284 head owned December 31, 1913, and 4,983 head December 31, 1912 ; 758 horses were also owned as of June 30, 1915. Capitalization. — Authorized, £400,000 shares (par £1) ; outstanding, £355,920. There is a contingent liability of 5s. per acre in respect of 107,923 acres (south of River Salado) in the event of the construction of a railway through such area before September, 1919. INCOME ACCOUNTS. Items. 1912 1913 January, 1914, to June 30, 1915. Profits »£3,320 6,673 £7,649 6,620 £8,244 12, 131 -3,353 + 1,029 -3,887 <■ No cattle sold during the year. No dividends are paid. Directors. — Alfred G. Gumpert, Prank W. H. Jones, Louis H. Kirk, Brig. Gen. the Hon. P. C. Stanley, D. S. O. ; acting secretary, G. Slane. Address : 792 Salisbury House, London, E. C. FOEESTAL LAND, TIMBER & RAILWAYS CO. (LTD.). Registered in England, 1906, to acquire and develop the business of a local company. Properties now owned consist of more than 4,800,000 acres of free- hold land and 630,000 acres of leasehold land in the Province of Santa Pe and the Chaco, Argentina. On the properties are extensive quebracho forests, live stock, light railways, etc. Factories to manufacture tanning extracts, etc., are owned. To develop the cattle business, the company recently purchased about 5 square leagues of alfalfa land at a cost of £175,589. The company has also acquired the properties of the Argentine Quebracho Co., as well as a large factory, with additional real estate in New York, from the New Y : Tanning Extract Co. The American company has been incorporated as tue New York Quebracho Extract Co. CAPITALIZATION DEC. 31, 1915. Securities. Authorized. Outstand- ing. Preference shares (par £1), entitled to a cumulative dividend of 6 per cent per annum and 25 per cent of the surplus profits available for dividend Ordinary shares (par £1) 5 per cent first-mortgage refunding debentures , 5 per cent mortgage debentures, 1914. Total £1,612,500 1,612,500 1,200,000 1,200,000 £1,545,850 1,545,849 "1,158,700 "1,186,400 5,625,000 5,436,799 a Balance retired through sinking funds. Reserves, £772,925; depreciation account, including sums set aside for re- demption of debentures, £634,170; bills payable, etc., £760,306; cash, £351,940; treasury bills and war loan owned, £521,461 ; bills receivable, etc., £974,250 ; stores and materials, £240,692 ; extract and felled timber, £1,045,952 ; live stock, £495,949; investments at cost, £567,358; property (timber, lands, railways, etc.), £4,405,918. 492 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. INCOME ACCOUNTS (CALENDAR YEARS). Items. 1913 1914 1915 Profits on trading, dividends, interest, etc Surplus, after depreciation, reserves, interest, etc Special reserve for excess profits, duty, income tax, war, and other contingencies Preference dividend appropriation Ordinary dividend appropriation To special reserve For other purposes No balance. £669,479 383,362 £615,114 234,065 o 149, 604 6 205,359 <• 123, 745 6 92,982 28,397 17,338 £1,281,660 900,947 200,000 "194,800 6 306, 147 200,000 a Year 1913: Paid, £148,780 (11 per cent); carried forward, £7,776. Year 1914: Paid, £123,668 (8 per cent); carried forward, £7,853. Year 1915: Paid, £185,502 (12 per cent); carried forward, £17,151. 6 Year 1913: Paid, £202,881 (15 per cent); carried forward, £23,305. Year 1914: Paid, £92,750 (6 per cent): carried forward, £23,536. Year 1915: Paid, £278,253 (18 per cent); carried forward, £51,430. Directors. — Great Britain : Baron Emile B. d'Erlanger, chairman ; Joseph C. Baldwin, jr., managing; Charles B. Gunther, Louis H. Kirk, Hon. Sir Arthur Lawley, G. C. S. I., Campbell P. Ogilvie, Baron Frederic Portalis, Thomas E. Preston, Leon Rueff, Brig. Gen. the Hon. F. C. Stanley, D. S. O. In Argentina : Victor Nerig, chairman; Enrique Berduc, Ernest Jewell, Thomas Lloyd, Vernon Lindop ; secretary, O. J. Buxton. Office : 149 Leadenhall Street, Lon- don, E. C. HARRODS (BUENOS AIRES) (LTD.). This company, controlled and operated by the management of Harrods (Ltd.), of London, was incorporated 1913 to acquire general stores in Buenos Aires. Freehold land and buildings are owned in Calle Florida, Calle Paraguay, Calle San Martin, and Calle Cordoba, these properties being carried on the books at a valuation of £615,930 ; fixtures, fitting, plant, etc., are carried at £176,425 ; stocks on hand and in transit, £407,005 ; shares of the Sociedad Anonima Thompson Muebles (Ltd.), £118,369; and inauguration outlays, including the acquisition of good will of the business of Harrods (South America), £144,589. Capitalization. — Preference shares, 6$ per cent cumulative (par £1), £600,000; ordinary shares, 10 per cent (par £1), £900,000; deferred shares (par Is.), £12,000; total, £1,512,000. Mortgages on property at Buenos Aires, £82,514. Cash, bills, etc., receivable, Treasury bills, etc., £64,860; sundry creditors, £74,728. No dividends have as yet been paid on the preference shares. After the ordinary shares have received 10 per cent the deferred shares, all of which are owned by Harrods Stores ( London ) , are entitled to the balance. Profits for the year ended August 31, 1915, amounted to £8,814, from which £6,467 was provided for depreciation, replacements, etc. There was a debit balance to profit and loss as of August 31, 1915, of £51,346. Sales from August 1, 1915, to November, 1915, showed an increase of about 77 per cent. Directors. — Sir Alfred J. Newton, Herbert Bennett, Edgar Cohen, William Mendel ; managing directors, Richard Burbidge, R. W. Burbidge ; secretary, R. H. Griffith, 87-135 Brompton Road, London, S. W., and Buenos Aires. LA PLATA ELECTRIC TRAMWAYS (LTD.). Registered 1909. Acquired the La Plata & Ensenada Tramways Co. (regis- tered 1890), which transferred its concession, recently obtained, to the suc- cessor company. This concession provided that in return for the electrification of the lines for 10 years all provincial and municipal taxes would be waived ; thereafter the company is to be taxed 4 per cent for the first five years and 5 per cent for the remaining period of the concession. The mileage operated is 33. The company, in common with nearly all of the tramway companies in Argentina, has suffered greatly on account of the war. Capitalization. — December 31, 1915: Ordinary shares, £250,000 (pnr £1) • preference shares, £200,000 (par £1) ; 5 per cent debenture stock authorized £200,000, outstanding £100,450. The preference shares are entitled to cumu- lative dividends of 6 per cent per annum. After 6 per cent has been paid on the ordinary shares 19 per cent of the profits revert to the directors APPENDIXES. 493 Dividends. — 1909 and 1910, 6 per cent each ; 1911, 6 per cent (3 per cent paid during 1911, li per cent during 1912, and 1J per cent during 1913) ; 1912, 3i per cent (paid during 1913) ; none since. INCOME ACCOUNTS (CALENDAR YEARS). Items. 1913 1914 1915 Miles operated Gross receipts Expenditures Net receipts Balance Drought forward. Interest, etc Surplus 29 £82,324 45,252 17,072 29 £56,186 44,273 11,913 330 5,629 6,614 30 £52, 821 41,455 11,365 6,614 5,837 12,143 From the surplus for 1915, £3,000 was credited to reserve fund. Directors. — W. • F. Hamilton, K. C, chairman ; Sir J. S. Harmwood Banner, M. P., W. T. Weston, W. M. Wilson; secretary, H. S. M. Woodrow. Office: 52 Moorgate Street, London, B. C. Manager: Valentine Brown, La Plata, Argentina. LEACH'S ARGENTINE ESTATES (LTD.). Incorporated 1912. Owns properties in Argentina, including cane and alfalfa plantations, cleared lands, uncultivated lands, sugar factory, sawmills, a light railway with rolling stock, etc. Property carried on books March 31, 1915, at a valuation of £1,777,357. The total area of the property is about 500,000 acres, located in the Province of Jujuy. CAPITALIZATION. Securities. Authorized. Outstand- ing. Preference shares (par £1), 6 per cent cumulative (also entitled to 25 per cent of surplus profits available for dividends) Ordinary shares (par. £1), entitled to 6 per cent noncumulative and 50 per cent of the surplus profits available for dividends Deferred shares, entitled to 25 per cent of surplus profits available for dividends. . First-mortgage debentures, 5J per cent Total £500,000 500,000 52,500 1,000, 000 £350, 000 475,000 52,500 °888,400 2,052,500 1,765,900 e £950,000 issued; balance retired through sinking fund. DIVIDENDS. 1913 1914 1915 Preference. Ordinary.. Per cent. 6 Per cent. 6 6 Per cent. 6 None. INCOME ACCOUNTS. Items. Year ended March 31— 1913 1914 1915 £146,233 89,442 £134, 558 90,768 £110, 223 109, 751 Depreciation, interest, London expenses, fees, debenture interest, 56,791 43, 790 472 494 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. As of March 31, 1915, stores and materials were valued at £ 70,092 ; animals, etc., at £66,443; sugar, alcohol, and coffee, £229,498; bills receivable, etc., £243,582; cash, £67,346; bills payable, £177,952; creditors and debit balances, £507,440 (since reduced considerably) ; reserves, £22,790. The sugar output has been as follows : 1912, 10,642 tons ; 1913, 18,121 tons ; 1914, 26,461 tons. Directors. — William B. Leach, chairman; Baron F. A, d'Erlanger, vice chair- man; John C. Gibson, Pierre Girod (Paris), Baron Frederic Portalis (Paris), Samuel Taylor (Great Britain), Walter Leach, Stephen Leach, Victor Negri (Buenos Aires) ; acting secretaries, T. H. Darton, W. F. Vaxley. Office : 8 Crosby. Square, London, E. O. ; also Paris and Buenos Aires. PARANA LIGHT & POWER CO. This company lights the city of Parana, Province of Entre Rios, Argentina. The city is the center of a rich grazing district and is populated largely with German, Swiss, and Italian colonists. Its population is 40,000. The property is operated by the J. G. White Co. (Ltd.) as managers. The public lighting contract expires in 1920. Capitalization. — $500,000 (United States gold) shares and $295,000 debentures, all owned by the International Light & Power Co. (Ltd.). Income account. — Year ended June 30, 1915: Net operating earnings, £11,998 (£11,317 for 1913-14) ; renewals, sinking fund, etc., £4,202; surplus carried to the balance sheet of the International Light & Power Co. (Ltd.), £7,796 (f 6,009 for 1913-14). Directors. — See International Light & Power Co. (Ltd.), page 536. PATAGONIAN SHEEP FARMING CO. (LTD.). This company was incorporated 1908 as a reconstruction of a company of a similar title and description, which was registered in 1897. Large farms and grazing areas have been acquired in the Territory of Santa Cruz, Patagonia, Argentina, and in the Territory of Magallanes, Chile. The company, which has only a limited number of shareholders, does an extensive sheep-ranching business. Capitalization. — Ordinary shares (par £1), authorized £200,000, outstanding £180,000; £23,000 debentures were recently outstanding. Income account. — Not made public. Directors. — W. G. Waldron, A. Waldron, G. L. Waldron, E. J. Mathews, W. L. Woods. Office: 101 Leadenhall Street, London, E. C. RIVER PLATE ELECTRICITY CO. (LTD.). Incorporated 1902. Acquired properties formerly operated by the River Plate Electric Light & Traction Co., which included electric undertakings and other properties in Buenos Aires, La Plata, and Tucuman. Properties at En- senada were also acquired. The Buenos Aires and Tucuman properties have since been disposed of, the former to the German Transoceanic Co., of Berlin, and the latter to the Tucuman Tramways, Light & Power Co. The German company paid to the River Plate Electricity Co. £150,000 5 per cent obligations, of which £138,800 remained outstanding December 31, 1915. No interest is now being paid on these obligations owing to the war. The Tucuman Tramways Co. issued to the River Plate Electricity Co., in part payment for properties ac- quired, £66,607 of its 5 per cent debenture stock and £21,000 shares of the Ar- gentine Electricity Co. (Ltd.). In addition, the River Plate Electricity Co. owns debenture stock and shares of the National Tramways of La Plata, La Plata Electric Tramways, etc. Capitalization. — £125,000 6 per cent noncumulative preference stock ; £150,000 ordinary stock; £25,000 preference shares (par £1); £25,000 ordinary shares (par £1) ; £200,000 5 per cent debenture stock (£250,000 authorized), interest payable January and July, redeemable at company's option on six months' notice. Income account. — Net revenue, 1915, £38,713; balance carried forward £59- 226 ; interest on 5 per cent debenture stock, £10,000 ; surplus, £49,226 ; preference dividend (6 per cent), £8,807; ordinary dividends (7 per' cent), £12 632- pro- visions for bad debts and income tax, £10,000; balance, £18,387. Dividends on ordinary stock: 1906, 2* per cent; 1907, 6 per cant; 1908, 8 per cent; 1909 <> nor cent ; 1910 to 1913, 10 per cent ; 1914, 8 per cent ; 1915, 7 per cent. Reserves T>p cember 31, 1915, £226,898; current assets, £47,820; current liabilities £66 917 APPENDIXES. 495 Directors. — M. W. Mattinson, K. 0., chairman; Robert Miller, Maj. George Pringle ; secretary, T. S. Hamilton, 62 New Broad Street, London, E. C. ; gen- eral manager, V. Lindop, M. I. E. E., La Plata, Argentina. RIVER PLATE TELEGRAPH CO. (LTD.). Capitalization. — £75,000 shares, par £10, of which £42,500 is fully paid and £32,500 is £4 paid. Controlled by Western Telegraph Go. (which see). Income account. — Not published. Secretary: E. S. Hodson, 5 Eoyal Bank Place, Glasgow, Scotland. ROSARIO DRAINAGE CO. (LTD.). Registered 1897 to take over the assets of the Rosario City Improvement Co. (Ltd.). The company has the concession to drain the city of Rosario, this concession expiring 1974, at which time the property and works revert to the city without reimbursement. The city may purchase the undertaking at an earlier date under certain conditions. CAPITALIZATION, JUNE 30, 1915 Securities. Authorized. Outstand- ing. Preference shares, 6 per cent cumulative (par £10) Ordinary shares Jpar £1) 5 per cent prior lien debenture stock, due 1928 4 per cent first debenture stock, due 1930 4 per cent second debenture stock, due 1930 Total £120.000 374; 000 150,000 200,000 250,000 £120,000 369,200 46,000 148,500 225,720 1,094,000 909,420 « £62,000 debentures nave been issued, of which £16,000 have been retired through sinking-fund operations. Interest on the prior lien debenture stock is payable January and July, and a sinking fund will redeem the issue at 105 by 1928. Interest on the first deben- ture stock is payable January and July, and interest on the second debenture stock is payable annually in October ; both issues are repayable at par in 1930 and at 110 if the company decides to redeem them at an earlier date. Dividends at the rate of 6 per cent per annum are being paid regularly on the preference shares ; dividends on the ordinary shares during recent years have been as follows: 1910-11, 3 per cent; 1911-12 and 1912-13, 4 per cent; 1913-14 and 1914-15, 3 per cent. INCOME ACCOUNTS. Years ended June 30— Number of house connec- tions. Gross revenues. Working expenses. Net rev- enues. 1906 3,793 5,272 5,702 6,134 6,344 6,466 6,925 £22,412 37,883 46,633 49,359 53,438 56,438 57,576 £8,471 10,930 11,996 13,108 12,645 12,983 12,759 £13,941 1910 :.. 1911 34! 637 1912 1913 40,792 43.455 44,817 1914 1915 To the net revenues for 1914-15, £44,817 (as above), should be added £10,134 brought forward from 1913-14. From this total there were deducted all in- terest and other fixed charges, also £6,758 dividend on the cumulative prefer- ence shares, leaving a balance of £26,795. Of this balance £11,076 was appro- priated for the dividend (3 per cent) on the ordinary shares and £2,500 for the reserve fund, and £13,219 was carried forward to 1916. Directors. — James Anderson, chairman; Philip W. Carr, Pollett Holt; sec- retary, G. Proctor, 52 Moorgate Street, London, E. C. 496 INVESTMENTS IN LATIN AMEEIOA AND BRITISH WEST INDIES. SANSINENA FROZEN MEAT CO. (COMPANfA SANSINENA DE CARNES CONGELADAS). Registered 1891 in Argentina to carry on a business in frozen and chilled meat, largely for export. Pounded 1881. Important freezing establishments owned at Buenos Aires and Bahia Blanca. Controls the Sociedad Frigorifica Uruguaya, at Montevideo. Capitalization. — 1916 (figures in Argentine gold) : Preference shares, 6 per cent cumulative, $1,500,000 o/s (these shares are largely held in Antwerp, Bel- gium) ; ordinary shares, $4,346,600 o/s, including $1,346,600 o/s shares issued in 1916, of which $450,000 o/s were issued as a special dividend on ordinary shares. A total of $653,400 o/s ordinary shares remain unissued. In addition, $750,456 o/s 5 per cent debentures were outstanding December 31, 1915, interest May and November, principal repayable at par on or before May 1, 1923. Dividends,— 1901, 22 per cent ; 1902, 50 per cent ; 1903, 12J per cent ; 1904 to 1907, 10 per cent ; 1908 and 1909, 12 per cent ; 1910, 15 per cent ; 1911, 10 per cent ; 1912 and 1913, none ; 1914, 10 per cent ; 1915, 10 per cent regular and 15 per cent extra (paid in stock). INCOME ACCOUNTS. Items. 1914 Credit balance forward Merchandise profits or losses Land profits Expenses, depreciation, etc. Surplus or deficit Argentine gold pesos. 5,809 -746,966 22,736 273,254 -991.673 Argentine gold pesos. None. +1,267,048 14,854 330,481 +951,421 Argentine gold pesos. 25,794 +1,464,714 None. 312,804 +1,177,703 Note.— Reserves as of Dec. 31, 1915, 1 ,308,606 Argentine gold pesos. EXPORTS OF MEAT. 1912 1913 1914 1915 719,762 472,487 507,919 401, 412 671,559 355, 993 490,283 362,427 Officers and directors. — President, vacant December 31, 1915 ; vice president, Alfredo G. Luro; directors, Miles A. Pasman, Samuel Hale Pearson, Rufino F. Luro, Carlos A. Tornquist ; auditor, Gmo. C. Pasman ; manager, Lino Landajo ; manager in Europe, W. D. Barnett. Office : 19-20 West Smithfield, London, E. C, and Calle San Martin 132, Buenos Aires. SOCIEDAD ANONIMA BODEGAS ARIZU. This company — incorporated 1907 — owns extensive vineyards in the Province of Mendoza, Argentina. Distilleries are also owned. Capitalization. — $10,000,000 m/n (Argentine paper) authorized, $6,000,000 m/n outstanding (par $100 m/n) ; £200,000 6 per cent first-mortgage deben- tures authorized, £146,680 outstanding (sold at 94 per cent) ; sinking fund, 2 per cent per annum. Properties stated (December, 1913) to be valued at £763,508. Income account, — Net profits, 1911, £20,161; 1912, £56,925; 1913, £38,475; 1914 (deficit), $157,196 m/n; debit balance December 31, 1914, $255,844 m/n. Directors. — B. Arizu, chairman; K. Mercado, J. Arlzu (secretary and treas- urer), F. T. Jacoby, K. W. Roberts. Office: Mendoza, Argentina. UNITED BIVER PLATE TELEPHONE CO. Registered 1886. Capitalization. — Five per cent cumulative preference shares, £200,000 (par £5) ; ordinary shares, £1,620,000; 4i per cent debenture stock due 2006 (callable at 105), interest January and July, £300,000; total capitalization, £2,120,000 Cost of property and real estate, £2,807,727; other (current) assets, £339,910; reserves, £925,602; credit balance to profit and loss, £128,234. APPENDIXES. INCOME ACCOUNTS (CALENDAR YEARS). 497 Items. 1915 Gross earnings Operating expenses Net profit Interest Surplus £630,652 455,346 175,306 13,500 161,806 £641.581 447,810 193, 771 13,500 180,271 In 1915 £20,000 was carried to reserve fund, £19,000 to depreciation of se- curities account, and £2,000 to staff provident fund. Dividends. — Five per cent per annum is paid on preference shares ; 8 per cent per annum has been paid on the ordinary shares since 1904. Directors. — Sir George Franklin, chairman ; Sir John Gavey, C. B., George Keith, Sir Frederick Green, Eustace Quilter ; secretary, A. H. Dawburn. Office : 5 London Wall Buildings, Finsbury Circus, London, B. O. QUOTATIONS AND DIVIDENDS OF SECURITIES. The following table, taken from the Review of the River Plate, shows the quotations and dividends of securities listed on the Stock Exchange at Buenos Aires, August 30, 1917: BANKS AND INDUSTRIAL ENTERPRISES. Names of enterprises. Share. Class. Value. Last dividend. Year ended— Per cent. Quotations Jan. 1, 1917, to Aug. 30, 1917. High- est. Low- est. Last. Tate of last quotation. BANKS. Frovincia de Buenos Aires. Ord. Frances del Rio delaPlata Ord. Nuevo Italiano Ord. Espanol del Rio delaPlata Ord. Italia y Rio de la Plata Ord. Galicia y B uenos Aires Ord . El Hogar Argentine! Deb. El Hogar Argentine- (80 Cer.. per cent paid). Com ereial Italiano Ord . Popular Argentine) Ord. INDUSTRIAL ENTERPRISES. Azucarera Argentina Ord. Azucarera Tucumana Ord. Retineria Argentina Ord. Sansinena Carnes Congela- Ord . das. Smithfield & Argentine Ord. Meat. Mercado Central de Frutos . Ord. Puerto San Nicolas Ord. Muelles de la Plata Ord. Catalinas Warehouses & Ord. Mole. La Germania Destileria, Ffd. etc. Do Ord. Cerveceria Palermo Ord. Cerveceria Rio Segundo . . . Ord. La Martona Lecherf a etc.. Ord. Introductora de Buenos Ord. Aires. Industrial Paraguaya Ord . River Plate Quebracho Co. Ord. Campos y Quebrachales Ord. Puerto Sastre. Quebrachales Fusioriados. Ord.. Cia. General Polladora Ord. . 63018°— 18 32 Argen- tine pesot. lOOm/n lOOo/s lOOm/n lOOmn lOOo/s lOOm/n lODm/n 250m/n lOOm/n 20m/n lOOo/s lOOo/s lOOc/s lOOo/s 5.040/s 50o/s 45m/n 25o/s 10.08o/s lOOo/s lOOo/s lOOm/n 500m/n lOOo/s lOOo/s 5o/s lo/s 4o/s Dec. 31,1916 Dec. 31,1915 June 30,1917 ....do Dec. 31,1915 do Aug. 31,1916 ....do , Dec. 31,1915 Apr. 30,1916 Dec. 31,1915 Mar. 31,1916 Apr. 30,1917 Dec. 31,1916 ....do June 30,1917 do Dec. 31,1915 ....do June 30,1917 ....do June 30,1916 do Dec. 31,1915 .....do Feb. 28,1916 Dee. 31,1915 Dec. 31,1916 nil. 12 5 5 4 8 8 6J 9 10 nil. 6 25 ol0 12 nil. 1.6 nil. nil. ml. 25 25m/n do 60. 25m/n Dec. 31,1915 12 • And 5 per cent bonds. 125. 00 48.00 215. 00 115.00 90.00 71.80 101.00 160.00 100. 00 27.00 150. 00 5.35 85.50 26.30 3.00 102. 00 1.05 3.70 108. 00 19.00 205. 00 104.00 82.00 66.80 101. 00 135. 00 95.00 25.00 125. 00 4.75 74.00 15.00 2.50 100. 00 .90 3.00 67.00 125. 00 41.00 215. 00 112. 00 85.00 66.80 103. 00 140.00 97.00 26.50 130. 00 98.00 97.50 150. 00 4.85 83.00 24.80 18.00 3.00 102. 00 150.00 100. 00 600.00 35.00 125. 00 2.80 1.00 3.25 93.00 34.00 Aug. 9,1917 Aug. 30,1917 Aug. 9,1917 Aug. 30,1917 July 5, 1917 Aug. 30, 1917 Aug. 9,1917 Aug. 30,1917 Aug. 23,1917 Aug. 9,1917 Nov. 11,1916 May 15,1913 Sept. 17, 1912 Aug. 30,1917 June 28,1917 Aug. 9,1917 Aug. 30, 1917 Feb. 5, 1914 Aug. 9,1917 June 21,1917 Aug. 30, 1917 July 17,1913 Oct. 10,1912 June 26,1913 Aug. 23,1917 Oct. 5, 1916 Aug. 9, 1917 Aug. 30,1917 Do. Sept. 15,1913 498 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. BANKS AND INDUSTRIAL ENTERPRISES— Continued. Names of enterprises. Share. Last dividend. Quotations Jan. 1, 1917, to Aug. 30, 1917. Date of last Class. Value. Year ended — Per cent. High- est. Low- est. Last. quotation. INDUSTRIAL ENTER- PRISES — continued. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord.. Ord,. Wd. . Ord.. Ord.. Ord.. Ord.. Argen- tine pesos. lO.OSo/s 20m/n lo/s lo/s lOOm/n lOOm/n lOOo/s 50m/n lOOm/n lOOm/n lOOm/n lOOm/n lOOm/n 50m/n lOOm/n lOOm/n lOOm/n lOOm/n lOOo/s lOOo/s June 30,1916 do do do Dec. 31,1915 July 31,1916 Dec. 31,1915 Dec. 31,1916 Mar. 31,1916 Dec. 31,1915 Aug. 31,1916 Dec. 31,1915 Nov. 30, 1915 Dec. 31,1916 June 30,1916 Aug. 31,1916 Apr. 30,1917 Deo. 31,1916 Feb. 28,1916 Aug. 31,1916 2.20 14.00 1.55 1.45 125. 00 35.00 90.00 126.00 72.50 33.00 235.00 320. 00 45.00 54.00 112.00 177. 00 107. 00 32.00 138. 00 120. 00 Dec. 28,1916 Aug. 2,1917 nil. . 4 nil. 2.5 nil. 5 16 6 nil. 30 25 nil. 12 7 20 8 nil. nil. 8 Quebrachales Paraguayos. Aug. 24, 1916 Aug. 23, 1917 Jan. 30,1913 July 26,1917 June 11,1914 Anglo-Argentina de Elec- tricidad. cidad. La Franco-Argentina de Seguros. 130. 00 75.00 39.00 120.00 71.50 34. 00 July 12,1917 Do. Argentina de Edification. . Aug. 2,1917 Aug. 30,1917 320. 00 305. 00 July 12,1917 Dec. 21,1915 Argentina de Panel 54.00 45.50 Aug. 9,1917 June 11,1913 177.00 128. 00 Aug. 30,1917 Nov. 20,1913 Uni6n. 37.00 29.50 Aug. 23,1917 May 29,1913 Dec. 16,1915 M. S. Bagley & Cia. (Ltda.) NATIONAL, PROVINCIAL, AND MUNICIPAL BONDS, STOCKS, AND CEDULAS. Bonds, stocks, and cedulas. Coupons due. In- terest. Sink- ing fund. Quotations Jan. 1, 1917, to Aug. 30, 1917. High. Low. Last. Per ct. 2J Per ct. 1 32.10 30.00 31.70 5 1 70.00 63.00 ea 20 6 1 88.00' 6 83.00 77.30 81.00 6 82.00 77.00 81.90 6 1 85.50 78.00 81.00 6 7 1 5 81.10 94.00 7 5 5 1 92.50 60.00 6 1 95.00 6 6 1 1 91.00 85.00 5 4 71.00 66.20 70.20 5 l 90.00 87.30 89.70 5 l 89.70 86.80 87.20 5 87.00 Date of last quotation. Province of Buenos Aires Internal Conversion. Deuda Interna Provincia Buenos Aires. Deuda Interna Provincia Buenos Aires. Deuda Interna Provincia Buenos Aires, serie 2. Deuda Interna Provincia Buenos Aires, serie 3. Dueda Consolidada Interna Provincia Santa Fe. Do Bonos Edificacion Escolar Santa Fe. Bonos Edificacion Pubilca Consolidada Provincia En- tre Rios. Deuda Municipal Buenos Aires. Emprestito Municipal Emprest ito Municipal Tea- tro Colon. Banco Provincia Buenos Aires con Obligaciones. Credito Argentino Interno. . Do. Do. Jan., July Jan., Apr., July, Oct. ....do -do.. ..do ..do Mar., June, Sept., Dec. Jan., Apr., July, Oct. ....do .do.. ....do May, Nov.. Feb., Aug.. Jan., Apr., July, Oct. Mar., June, Sept., Deo. Feb., May, Aug., Nov. Aug. 30,1917 Do. July 19,1917 Aug. 9, 1917 July 26,1917 Aug. 30,1917 Apr. 19,1917 Dec. 31,1913 Do. Aug. 24,1916 May 17,1917 Aug. 24,1916 Mar. 15,1917 Aug. 23,1917 Aug. 30,1917 Do. June 21,1917 APPENDIXES. 499 NATIONAL, PROVINCIAL, AND MUNICIPAL BONDS, STOCKS, AND CEDULAS— Contd. Bonds, stocks, and cedulas. Coupons due. In- terest. Sink- ing fund. Quotations Jan. 1, 1917, to Aug. 30, 1917. Date of last quotation. High. Low. Last. Bonos de Edificacifin Esco- Jan., Apr., July, Oct. do Per a. 6 5 5 3 5 6 6 8 7 6 5 6 6 6 6 6 Perct. 1 1 7 1 4 2 20 1 76.00 89.50 75.50 44.70 93.50 89.00 71.50 89.50 104. 00 97.50 88.30 101.30 96.30 95.50 94.30 •94.00 June 21, 1917 lar Provincia Buenos Aires. Emprestito Municipal Pavi- 90.00 77.90 44.80 79.00 72.00 40.50 Aug. 30,1917 Do. mentacion. mentation. Province of Buenos Aires July 26,1917 Dec. 21,1916 Loan, 3* per cent. Obras de Salubridad Mar., June, Sept., Dec. do Province of Tucuman Loan. Rosario Municipal Bonds. . . Dec, 1912. May 24,1915 Deo., 1912 Pavimentacidn de Mendoza. National Cedulas: 105.00 104.80 92.00 101.50 98.80 96.50 95.10 96.50 102. 00 96.00 85.00 95.50 93.10 91.00 91.10 91.50 Aug. 30,1917 Aug. 16,1917 Aug. 30,1917 Mar., Sept Do. Cedula Argentina, first series Cedula Argentina, second Do. do Do. series. Bonos Ilipotecarios Banco Do. , de la Provincia. RETURNS FROM RAILWAY OPERATIONS. The following table, taken from the Review of the River Plate, shows the returns from the operations of Argentine railways for the fiscal years ended June 30, 1916 and 1917 : Railways. Miles open. 1916 1917 Last working expenses Returns from opera- tions for year ended June 30— 1916 1917 Increase or decrease. Buenos Aires Great Southern. . . Buenos Aires Pacific Central Argentine Buenos Aires Western Buenos Aires Midland Entre Rios Railways Argentine Northeastern Cordoba Central Railway system Rosario-Puerto Belgrano Province of Santa Fe Province of Buenos Aires Central Northern Buenos Aires Central 3,792 3,535 3,307 1,867 322 831 752 1,186 493 1,181 790 3,000 252 3,792 3,535 3,305 1,870 322 831 752 1,205 493 1,192 790 3,045 252 Per cent. 57.04 61.16 58.43 58.22 54.76 54.51 60.55 71.59 79.77 61.16 £5,541,000 4,645,000 5,725,000 2,719,000 126,600 613,000 323,800 1,543,991 £5,728,000 4,414,000 5,237,100 2,513,000 157,900 641,700 389, 100 1,562,000 +£187,000 -231,000 -487,900 -206,000 +31,300 +28,700 +65,300 +18,009 93.58 48.50 Sm/n 2,687,200 11,303,000 7,865,976 o8,167,788 3,328,459 $ m/n ' 2,314,700 13,555,000 8,895,798 <"9,108,318 3,385,142 tm/n -372,500 +2,252,000 + 1,029,822 +940, 530 +56,683 o For six months ended June 30. Note. — Operations of the Central Railway of the Chubut Co. and of certain Government railways are not included in the above table 500 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. INCREASED WORKING EXPENSES OF RAILWAYS. The following table from the statement of railway managers, submitted in connection with a request for rate increases (1917), shows the increase in working expenses through enhanced cost of fuel and materials in 1918 compared with and on the basis of the traffic movement during the financial year 1912-13 : Items. Tons. Price per ton. Total cost. Increase in expenses. FUEL. Consumption and cost during financial year 1912-13 Present cost, assuming same traffics and consumption as in 1912-13 138,051 138,051 tm/n 28.84 78.68 tm/n 3,429,091 10, 861, 853 3,005,236 6,220,839 tm/n 7,432,762 MATEBIALS. Total cost of materials used on revenue account during financial year 1912-13 Present cost of materials placed in Buenos Aires, represent- 3,215,603 10,648,365 BOLIVIA. ANGLO-BOLIVIAN RUBBER ESTATE (LTD.). Registered 1910 to acquire a large rubber estate (900,000 acres) located in the province of Valasco, Bolivia. Capitalization. — Authorized, £62,500; outstanding, £55,677; par, Is. Report for year ended June 30, 1915 (published December, 1915), stated that a profit of £2,438 was earned and that a dividend of 2J per cent was paid. In 1917 the dividend rate was 12J per cent. Directors. — W. R. Gaff, chairman ; A. Gray Wallis, A. B. Shaw, James Green- less. Office : 54 New Broad Street, London, B. C. ARAMATO FRANCKE MINES (LTD.). Registered 1906 to acquire mining properties at Tupiza, Bolivia, as well as mines, metallurgical works, etc., situated in north and south Chichas, Bolivia. The cost of these properties was £494,090 in fully paid shares. In 1908 properties covering the Chorolque Mountain were acquired for £139,999 cash. Tin is the principal product, although silver, bismuth, copper, and wolfram are mined. Tin production: 1910-11, 3,818 tons; 1911-12, 4,105 tons; 1912-13, 3,694 tons- 1913-14, 3,442 tons ; 1914-15, 2,060 tons ; 342 tons of copper matte were sold in 1913-14 and 111 tons in 1914-15. Capitalization. — £600,000 shares (par £1) ; £100,000 6 per cent debentures were issued 1909 but have been practicallv all redeemed. Shares sold in 1914, high 1J, low 1} ; in 1915, high 1J, low 1. Dividends.— 1910-11, 12J per cent; 1911-12, 15 per cent; 1912-13, 17$ per cent; 1913-14, 19 per cent; 1914-15, 7 i per cent; 1915-16, 10 per cent; 1916-17, 30 per cent. The report for the year ended May 31, 1915, indicated a loss of £36,444 after £20,000 was provided with which to redeem debentures. In addition. £44,783 divi- dends were paid from credit balance forward. The credit balance to be carried forward to 1916 account was £9,139. The profit earned in 1913-14 was £92,077, after £30,000 was provided for debentures redeemed. It is expected that better results will be achieved during 1915-16. As of May 31, 1915, the stock of tin etc., was valued at £278,750, while large additional assets were held In 1916 and 1917 net profits were £167,557 and £225,315, respectively. Directors.— F. A. Aramayo. chairman ; J. D. Campbell, B. Dale, R. G Ribon L. A. Kensington, I. Gutierrez-Ponce. General manager: M. Roberts Offlw- 148J Fenchurch Street, London, E. C. ' yjm,x - APPENDIXES. BERENGUELA TIN MINES. 501 Registered 1905. Owns 447 acres of tin lands near Berenguela, Bolivia. Output of tin : 1912-13, 153 tons ; 1913-14, 202 tons ; 1914-15, 193 tons. Capitalization. — £20,000 shares authorized ; £6,938 issued ; par £1. Profit.— 1914-15, £475 ; carried forward, £3,617. Directors. — J. MacAndrew, chairman ; H. M. Read ; secretary, G. C. Elgee, Leadenhall Buildings, London, E. C. Manager : C. L. Price, Berenguela, Bolivia. COROCORO UNITED COPPER MINES (LTD.). Registered 1909. Owns extensive copper properties in Oorocoro, in the La Paz district, Bolivia. More than 500 mines and a reduction plant are -owned. The Corocoro branch of the Arica-La Paz Railway runs to the mines. Capitalization. — Authorized, £700,000 shares (par £1) ; outstanding, £673.607 shares. Income account. — Net profit for the year ended June 30, 1915 (after writing £2,000 off development, and providing £10,000 for loss in exchange and for underwriting), £22,259, as against £23,163 for 1913-14. Reserve, £10,000; car- ried forward, £8,299. Dividends.— 1913-14, 60 centimes; 1914-15, 1 franc. Chairman : Baron Ren6 de Batz. Secretary : R. Leo, 7 Rue des Italiens, Paris. London office: Finsbury Pavement House, London, B. C. HUANCHACA CO. OF BOLIVIA (COMPANiA HUANCHACA DE BOLIVIA). This large company was incorporated in Bolivia in 1873 to operate silver mines. These mines comprise 3,300 acres situated in Pulacayo, Potosi district, Bolivia. Silver, zinc, lead, gold, copper, and antimony are mined. A railway, about 43 kilometers (27 miles) in length, connects the mine with the main line of the Antofagasta (Chile) & Bolivia Railway. Capitalization. — 12,800,000 bolivianos (40,000,000 francs) ; par 125 francs. Listed on the Paris Bourse. Dividends. — 5 francs per annum, paid in 1907 and in 1908; none since. Large dividends were paid in earlier years. Debit balance, January, 1915, 173,025 bolivianos. Reserve fund, 1,000,000 bolivianos. President : A. Alessandri. Secretary : R. Deves. Office : Calle Prat 141, Val- paraiso, Chile; Paris Office, 87 Rue St. Lazare. NATIONAL MATCH FACTORY OF BOLIVIA (LTD.). Registered in 1907 to acquire a concession from the Government of Bolivia for the exclusive right to manufacture and sell matches in that Republic. The concession will expire in 1930. Under the contract the Government will take 50 per cent of the profits — after debenture service. The factory, which is located at La Paz, is equipped with all modern machinery, and is sufficient in capacity to manufacture more than 130,000 gross of boxes per annum. Capitalization. — December 31, 1915 (latest obtainable data) : Preference shares, 6 per cent, cumulative (par £1), £30,000; ordinary shares (par £1), £50,000; debenture stock (first), 6 per cent (to be retired by 1928), £72,175; total, £152,175. Income account. — Year ended December 31, 1914 : Profits for the year, £36,602 ; expenses (including £4,330 debenture interest, and £4,800 paid to the Bolivian Government), £508. No dividends are being paid. Debit balance to profit and loss as of December 31, 1914, £4,841. . Directors. — Geo. W. Paton, chairman; O. H. Fuerth, Albert Pam, H. B. Col. Don. Pedro Suarez, Francis M. Voules; secretary, A. R. Bennett, 65 Bishopsgate, London, B. C. PORCO TIN MINES (LTD.). Registered 1912. Acquired from the Potosi-Porco (Bolivia) Syndicate (Ltd.) the Porco Tin Mines, area about 400 acres, situated on the Antofogasta & Bo- livia Railway (25 miles from Potosi, Bolivia). The mine, now operated for tin, was formerly worked for silver. Ore is conveyed to the mill (capacity 80 tons a day) by means of a 2J-mile aerial ropeway. Estimated ore reserve, 250,000 tons. Valuable water rights are owned. 502 INVESTMENTS IN LATIN AMEBICA AND BRITISH WEST INDIES. Capitalization.— £140,000 shares authorized (par £1) ; £120,075 outstanding, also £19,900 6 per cent convertible debentures. Creditors December 31, 1914, £22,087. Income accounts. — Not obtainable. Directors. — E. Hooper, chairman ; J. Edwards, L. A. Kensington, J. MacAn- drew; secretary, H. P. Ings, 148$ Fenchurch Street, London, E. C. General manager, H. A. Lewis. TIN PRODUCTION OF BOLIVIA IN 1915. According to published statistics the tin production of the world in 1915 was 121,800 tons, derived from the following sources : Straits, 54.59 per cent ; Bo- livia, 29.97 per cent ; Banka, Billiton, etc., 15.44 per cent. The following table (taken from the West Coast Leader) shows in detail the mining companies of Bolivia which contributed to this production in 1915, with the respective quantities in kilos and the value thereof: Companies. Kilos. Value. Companies. Kilos. Value. DEPARTMENT OI POTOSI. tFncia Llallagua Velarde Cia. Oploca Rescate de Rescate Cerro-Rico Chocaya Chorolque SalaSala Molino San Joaquin Colquecnaca Cotani Ocuri Aguade Castilla Sagrario Andaoava Guaii-Guari Tazna Eagao Carguaycollo Concordia Choraya Buen Retiro San Vicente San Antonio Pulacayo Consolidada Maragua Candelaiia Alianza E smoraca ORURO. Huanuni Morococala de Rescate Socavon , Avi vaya , 415, 894 811,944 376, 163 965,762 651,301 109,058 077,805 725,553 605,188 484,287 484,178 243,204 242,949 167,007 131,884 91,938 87,764 55, 167 50,886 32,095 22,295 21,959 21,350 20,156 20,047 19,619 18,775 9,850 9,220 8,590 6,450 5,344 1,662 1,696,659 1,439,771 1,138,184 727,660 602,016 Bolivianos. 10,351,550 7,148,691 2,922,681 2,417,887 2,031,100 1,350,547 1,325,700 892,430 744,381 595,673 595,539 299,141 298,287 205,419 163,447 113,084 107,950 67,855 62,590 48,117 27,423 27,010 26,260 24,782 24,658 24,131 23,093 12,015 11,341 10,566 7,933 6,573 2,044 2,086,891 1,770,918 1,402,632 895,022 762,620 oruro — continued. Totoral Co. Mra. Oruro.. San Jose Pazna Negro Pabellon. . Itos.. Antequera Challapata Challa-apacheta. Vinto Sepulturas , San Cristo Eucaliptus Japo Viloca Araca Milium' Tres Cruces... Berenguela Chocnacota Concordia Solano Quime Colcha Colquiri Tuesunuma... Bajaderia Andes Tin Co.. Santiago Yaco Kami Ocavi Jatuncaka Villaque de Rescate Acnachicala... 513,454 428,679 341,816 288,729 173,578 122,220 84,556 31,577 29,214 24,160 16,534 7,630 4,460 3,050 622,283 528,625 317,362 292,576 243,291 283,755 114,322 97,754 58,432 57,431 52,088 45,194 38,974 28,509 20,615 18,807 13,861 10,659 9,200 5,119 3,056 2,034 Bolivianos. 631,548 527,275 420,434 355,137 213,501 150,331 104,004 38,840 35,933 32, 117 20,337 9,385 5,486 3,751 765,408 650,209 390,355 359,868 299,248 275,219 140,616 120,237 71,871 70,640 64,068 55,589 47,938 35,067 25,356 23,133 17,049 13,111 11,316 6,296 3,755 2,502 Total 36,533,238 44,884,911 BRAZIL. ALAGOAS & NORTHERN RAILWAY. Registered October 30, 1912, to construct about 90 miles of railway, extending from Bom Jardim, State of Alagoas, Brazil, to Jacuhype, with a' branch to Leopoldina. The concession carries a guaranty of 5 per cent on a capital of 45 contos per kilometer. This guaranty is granted by the State of Alagoas which has the right to purchase the property after 20 years under certain conditions. Capitalization.— £250,000 shares (par £10), all owned by the Great Western of Brazil Railway (which see). Advances due the latter company December 31 iyj.Dj x j.*.D,yij*7. APPENDIXES. 503 The line has been surveyed, partly graded, and about 3 miles completed. Work has now been practically abandoned. AMAZON TELEGRAPH CO. This company operates about 2,500 miles of cables on the Amazon River, extending from Para to Manaos, with branches on the Para River, Tocantius River, etc. Two twin-screw cable ships are owned. The company in its earlier days had great difficulty in maintaining the service owing to snags, rocks, cave-ins, etc. These difficulties have been largely overcome in recent years. Capitalization.— £ 250,000 stock (par £10) and £272,900 5 per cent debentures. Dividends on the stock are payable annually in November (4$ per cent in 1912 and 1913, 3 per cent in 1914, none since) ; debentures January and July. Listed on the London Stock Exchange. Income account. — Year ended June 30, 1915 : Traffic receipts, £39,177 ; Govern- ment subsidy, £19,125 ; total, including other income, £57,933 ; expenses, £34,939 ; debenture interest and sinking fund, £22,888 ; surplus, £66 ; balance from pre- ceding year, £5,841 ; balance carried forward, £5,947. Reserves June 30, 1915, £54,500. Financial condition good. Directors. — George Keith, chairman ; E. B. Ellice-Clark, Charles W. Parish, Maj. Eustace G. Quilter ; secretary, M. S. Munns. Office : 42 Old Broad Street, London, E. C, and Para, Brazil. Manager : F. E. Nosworthy, Para, Brazil. BRAZILIAN EXTRACT OF MEAT AND HIDE FACTORY. Registered 1887. Owns the Paredao factory near Porto Alegre, Brazil ; also other concessions. The number of cattle killed by the company in 1915 was 3,196, as compared with 3,631 in 1914 and 3,072 in 1913. Extract of beef is manufactured. Capitalization. — January 1, 1916: Ordinary shares (par £1), £21,109; deben- tures, authorized £50,000 (6 per cent), outstanding £8,000 (exclusive of £15,000 issued as security against floating loan). Income account. — Year ended December 31, 1915: Loss on trading in Brazil, £55; total loss for year, £1,312 (loss for 1914, £848; profit for 1913, £1,958). Goods and products on hand, December 31, 1915, £10,981 ; cash, £765 ; sundry debtors, £1,868 ; sundry creditors and credit balances, £11,439 ; reserve funds, £8,842. Directors. — John Beckwith, John Mackenzie, Joseph Edward Roura ; secre- tary, S. L. Clarke. Office : 3 Great Winchester Street, London, E. C. BRAZILIAN STREET RAILWAY CO. (LTD.). Incorporated 1868 and reorganized 1899. Owns a tramway 16 miles in length connecting Recife (Pernambuco) with Caxanga, Brazil ("Trilhos Ur- banos do Recife a Caxanga"). Capitalization. — Authorized £120,000 in shares of £1 par, outstanding £32,537 5 per cent cumulative preference shares and £86,900 ordinary shares ; also £45,950 5 per cent debenture stock, redeemable at 105 per cent, interest April and October. In 1914 this company's security holders were offered the opportunity of ex- changing their debentures and shares for securities of the Pernambuco Tram- ways & Power Co. (which see). Office: 134 Palmerston House, Bishopsgate, London, General manager: H. Fletcher, Pernambuco, Brazil. BRAZILIAN WARRANT CO. Registered 1911 to take over a company with a similar name. The company's business embraces the following: (1) Providing banking facilities for the coffee trade and for merchants of Santos, Sao Paulo, etc. ; (2) warehousing and han- dling coffee and other agricultural produce; (3) acting as a clearing house; (4) handling coffee for export; (5) interested largely in an extensive cartage busi- ness in Santos, etc. The principal subsidiaries are the S5o Paulo General Warehouse Co., owning the largest warehouses in South America, the Companhia Registrado de San- tos, the Atlas Coffee Co., the Pure Coffee Co., the Santos Cartage Co., etc. A smalJ guaranty is received annually from the State of Sao Paulo. 504 INVESTMENTS IN LATIN AMeEICA AND BEITISH WEST INDIES. CAPITALIZATION, DECEMBER 31, IMS Securities Author- ized. Outstand- ing. Ordinary shares 7 per cent cumulative preference (par £1) Total £750, 000 250,000 £612,505 248,650 1,000,000 861,150 Dividends. — Full preference dividends of 7 per cent per annum have been maintained since the creation of the issue in 1914. Ordinary dividends have been as follows : 1912 and 1913, 7i per cent ; 1914, 5 per cent ; 1915, 24 per cent (li per cent October, 1915, and li per cent April, 1916). INCOME ACCOUNTS (CALENDAR YEARS). Items. Profits, interest received, rents received, etc. . London expenses, income tax, etc Surplus Balance forward after dividends, reserves, etc £100,583 5,183 95,400 53,475 £115,318 o 22, 273 93,045 59,018 £94,635 615,672 78,964 40,503 a Includes £11,901 expenses, issue of preference shares. 6 Includes £10,000 income-tax reserve. From the surplus of 1915 £50,000 was appropriated to the reserve funds, which amounted, as of December 31, 1915, to £160,000. Among assets were £379,044 investments, £25,000 Treasury bills, £589,709 sundry debtors and debit balances, £212,480 stocks and stores, £82,333 cash, and other assets £55,529. Liabilities included £64,577 bills payable and £249,500 sundry creditors ana credit balances. Directors. — Charles E. Johnson, chairman ; Edward Greene, managing direc- tor; Frederic N. Chappie, Joseph Danon, Julius Deussen. Thomas Fraser, Thomas Thornton ; secretary, A. Macdonald, 38 Great St. Helen's, London, E. C. Manager : Charles R. Murray, 44 Rua Sao Antonio, Santos, Brazil. CASCALHO SYNDICATE (LTD.). Registered 1914. Owns three alluvial gold concessions about 4 miles in length (area 6,180 acres) on the Macuhubas River, Diamantina district, State of Minas Geraes, Brazil. It is intended to float subsidiary companies, each to develop certain sections of the property. Capitalization.— £90,000, consisting of £35,000 "A" shares and £55,000 "B" shares, par £10. This capital is to be increased to £375,000 "A" shares and £110,000 " B " shares. The "A" shares are entitled to 100 per cent dividends in priority to the " B " shares. After " B " shares receive 100 per cent both issues share pro rata. The properties are now in the process of development. No dividends. Directors. — E. Cattanacle, chairman ; W. G. Duncan, W. R. Gaff ; secretary, E. A. Foster, 6 Great St. Helen's, London, E. C. Agents in Brazil : P. is. Nicolson & Co., Rio de Janeiro. CITY OF SANTOS IMPROVEMENT CO. (LTD.). Incorporated 1880. Supplies water, gas, and electricity to Santos, Brazil, and operates the tramway lines in that city (population 40,000). The govern- ment may purchase the water system at a fair valuation. The company at present has exclusive franchises which will expire at various dates beginning 1920. After expiration of exclusive franchises the company will retain plants and property and all privileges except exclusive right to operate. The total mileage of traction lines is 38. Lines cover the city and extend to Barra Beach, Sao Vicente, and other suburbs, serving a total population of about 150,000. A total of 14,870,776 passengers were carried during 1915, as compared with 15,346,362 in 1914. APPENDIXES. 505 Capitalization— December 31, 1915: £800,000 ordinary stock, £200,000 6 per cent cumulative preference stock, par value of both issues £19; 5 per cent first charge debentures (redeemable), authorized £200,000, outstanding £132,200 (par £100), interest payable January and July; 5 per cent tramway debentures, £200,000 authorized, £179,100 outstanding (these debentures are redeemable; £4,200 redeemed during 1915). Dividends. — Full dividends have been paid on preference shares for a number of years. The ordinary stock received 7 per cent annually from 1909 to 1913 ; 3 per cent in 1915. INCOME ACCOUNTS. Items. 1915 Revenue in Santos, etc Net revenue Debenture interest and sinking fund . Balance for dividends £108,352 95,557 £101,130 82,239 26,141 56,098 £83,439 71,759 25,870 45,889 Balance sheet. — December 31, 1915: Current assets, stores, cash, etc., £211,885; current and accrued liabilities, £76,372; renewal account (tramways), £26,000; reserve, £67,000; balance to credit, £40,517. Directors. — D. M. Fox, chairman ; F. Henderson, M. U. Workston, H. K. Heyland ; secretary, B. H. Sulman, London. London address, Gresham House, E. C. CITY OF SAO PAULO IMPROVEMENTS & FREEHOLD LAND CO. (LTD.). Registered 1911. Acquired approximately 15,000,000 square yards of freehold land in the western section of the city of Sao Paulo, Brazil, for the purpose of subdividing into plots to be sold, leased, or rented. Capitalization.— £2,000,000 shares fully paid (par £10) ; £2,000,000 6 per cent first mortgage gold bonds (par £20 and £100), interest March and September. A sinking fund (beginning 1916) draws bonds at 105. The bonds are redeem- able at 105 on six months' notice. They are secured by a first mortgage on lands owned and a proportionate amount of the proceeds of land sales is to be used for redemption purp'oses. During the 15 months to December 31, 1912, and during 1913 funds were advanced to meet interest requirements, the ven- dors receiving in payment for funds advanced £252,630 6 per cent second mort- gage bonds, due 1932. The September, 1914, coupons on the two bond issues were not paid nor have any subsequent payments been made. Income account. — None published since 1913 ; in that year there was a deficit of £146,631. Directors. — Lord Balfour, of Burleigh, K. T., chairman ; J. Brown, vice chairman ; C. Braga, H. E. Cradock, G. de Cergat, H. Guedalla, A. D. Gurd, R. de Livio, R. Peto, Dr. H. B. Sabino, Lt. Col. Sir H. B. Smith, L. R. Vigero ; secretary, H. E. Carter, 2 Broad Street Place, London, E. C. COMPANHIA FORCA E LUZ. This company was incorporated in 1905 to furnish light and power to the following cities located in the State of Minas Geraes, Brazil: Mirahy, Porto San Antonio, Cataguazes, Leopoldina, Sao Joao Nepomuenco, Rio Novo ; also to other towns and districts. Power plant located at Leopoldina, the current being generated from a waterfall of about 18,000 horsepower. Capitalization. — 1,000,000 milreis bonds and 300,000 milreis 8 per cent de- bentures ; 2 per cent cumulative sinking fund retires bonds at par. President, Dr. J. M. Ribeiro Junqueira ; secretary, Antonio H. Felipe ; treas- urer, Dr. Norberto C. Ferreira ; manager, Dr. Gabriel M. R. Junqueira ; direc- tors, the above. Office: Cataguazes, Minas Geraes, Brazil. COMPANHIA INDUSTRIAL, OF RIO GRANDE. Incorporated 1913. Manufactures cotton goods, soaps, vegetable oils, etc. Company owns valuable cotton plantations and also has a concession to con- struct 125 miles of railway in the State of Rio Grande do Norte. Capitalization. — 3,500,000 milreis. 506 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Officers. — President, Thomas A. A. Saraiva ; secretary, Robert Sauce; treas- urer, Francisco Solon. Office: Natal, Brazil. CREDIT FONCIER DU BRESIL. This company, incorporated in Paris 1907, advances loans, does a general brokerage business, etc. The capital consists of 12,500,000 francs of stock (par 500 francs), and 37,500,000 francs first mortgage 5 per cent 50-year bonds, Series A. The authorized bond issue is 250,000,000 francs (par 500 francs). The company's affairs in France are administered by a council, the president of which is Achille Adam, Paris, and the vice president Baron Amede Reille. In Brazil Dr. Joao Teixefra Soares is president of the local council. Office: Avenida Rio Branco 44, Rio de Janeiro, Brazil. CONQUISTA-XICAO GOLD MINES (LTD.). A French company, registered 1907. Owns about 46,000 acres of gold-mining lands in the Sapucahy Valley, Minas Geraes, Brazil; also dredging rights and other properties, including hydroelectric works on the Palmella River. These hydroelectric works, in addition to supplying power for the mines, furnish light and power to the towns of Sao Goncalo and Campanha. A narrow-gauge railway is also owned. Capitalization. — £100,000 preference and £270,000 ordinary (par £1). The preference shares are entitled to 6 per cent per annum cumulative fixed and 70 per cent of balance. No dividends. Directors. — E. Claude, president ; A. Lazard, E. Lautier, Col. M. A. de Lemos, V. V. G. Wilhelm, E. Sordet ; secretary, R. B. McNelly. Offices : 1 Broad Street Place, London ; 48 Avenida Rio Branco, Rio de Janeiro, Brazil ; 54 Rue Blanche, Paris. Manager, D. Proust, Campanha, Brazil. JARDIM BOTANICO TRAMWAY CO. Registered 1882. Operates about 50 miles of tramway lines in the Jardim Botanico section of Rio de Janeiro, the concession expiring in 1960. Controlled by the Rio de Janeiro Tramway, Light & Power Co. (which see), through own- ership of a majority of shares. The latter company has assumed the operation of the property, taking all gross earnings and paying all operating expenses, as well as interest on the Jardim Botanico Tramway Co.'s bonds and 7 per cent dividend on the shares. Capitalization. — (1) 21,000,000 milreis shares, par value 200 milreis, of which 14,000,000 milreis are fully paid and 7.000,000 milreis 60 per cent paid; (2) first-mortgage 5 per cent bonds dated 1911, repayable on or before July 1, 1951, by means of a sinking fund which purchases bonds up to 102J or draws them at that figure (£1,400,000 bonds are authorized and all have been issued). Inter- est payable January and July at Canadian Bank of Commerce, Toronto and New York. Income account. — Not published. Offices: Toronto, Canada; Rio de Janeiro, Brazil; and 34 Bishopsgate, London, E. C. LEOPOLDINA TERMINAL CO. (LTD.). This company was registered 1911 and had acquired to December 31, 1915, 45,599 of a total of 50,000 shares (par 200 rnilreis) in the Companhia Canta- reira e Viagao Fluminense, which has a concession to operate approximately 45 miles of tramway lines in the city of Nictheroy (opposite Rio de Janeiro), Brazil. The population of the city is about 40,000. The company also operates a line of ferries between Rio and Nictheroy and a warehouse in the city of Rio. The company is controlled by the Leopoldina Railway. Capitalization. — December 31, 1915: Ordinary shares, £1,250,000 (par £1), of which £625,001 are owned by the Leopoldina Railway (which see) ; first debentures (par £100), £1,237,000. A sinking fund of one-half of 1 per cent per annum is in operation. Interest is payable January and July 1. The proceeds of this debenture issue were used to acquire securities and to liquidate current accounts. APPENDIXES. INCOME ACCOUNTS, CANTAREIRA CO. (CALENDAR YEARS). 507 Items. 1912 1913 1914 1915 MARITIME SECTION. Gross receipts Working expenses Maintenance Net receipts TRAMWAYS SECTION. Gross receipts Working expenses Maintenance Net receipts "WAREHOUSES AND PIERS. Gross receipts Working expenses, including maintenance Nat receipts '. WATER SERVICE. Gross receipts Expenses Net receipts.* £150,391 70,254 20,672 £162,350 70,379 29, 105 £130,723 59,211 22,006 £103,404 55,117 18,945 9,465 62, 866 49,506 29,342 127,402 50,072 28,239 140,414 52,070 32, 149 113, 810 43,652 28,653 103,404 33,087 22,006 49,091 56, 195 41,605 48,311 19, 496 7,258 16,024 6,463 16,090 4,648 15,168 3,726 12,238 9,561 11,442 26,352 13,415 ol3,290 a 5, 214 12,937 o Figures are lor six months only; the concession for the water service was disposed of during the year 1913 to the government of the State of Rio de Janeiro for £253,480, which sum was transferred to the Ter- minal Co. and used to reduce outstanding advances. Note.— Administration and general expenses of the Cantareira Co.: 1912, £19,877; 1913, £22,354; 1914, £17,376; 1915, £14,992. REVENUE ACCOUNT OF TERMINAL CO. Items. 1913 1914 1915 £85, 770 3,599 £69, 703 4,994 £66,905 89,369 68,750 74, 697 68,750 72,852 69, 114 20, 619 5,947 3,738 ol5,625 None. o 11 per cent. Cash on hand or on deposit at interest, December 31, 1915, f 68,622 ; bills re- ceivable, £13,751 ; 5 per cent debentures of company owned, £78,461 ; sundry creditors, £7,888. Directors. — Oliver R. H. Bury, chairman; R. E. Brounger, N. B. Dickson, Col. Sir Henry B. McCallum, J. H. Wicks ; secretary, 3. H. Drury, 3 Lombard St., London, E. C. MANAOS TRAMWAYS & LIGHT CO. (LTD.) Registered January, 1909. Acquired from the State of Amazonas, Brazil, a concession for the lighting and tramway systems of the city of Manaos (on the Amazon River; population, 60,000). Property reverts to the State in 1968 without payment. The company is exempt from customs duties on supplies, etc., and the consideration payable under the concession is £12,500 per annum for the first five years, thereafter increasing £1,250 per annum for each five-year period. Capitalization. — April 30, 1915: Shares (par £1), £300,000; 5 per cent first (mortgage) debentures, £293,900; subsequently £50,000 debentures were issued as collateral for a loan. The expense of the debenture issue (including £49,500 discount) was £53,000. Reserves as of April 30, 1915, £50,725; loan outstanding, £28,000. 508 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. INCOME ACCOUNTS. Items. Year ended April 30— 1915 Grossreceipts Operating expenses Net receipts Net income Charges Surplus £152,106 101,943 50,103 50, 163 18, 510 22, 107 £132,877 96,848 36,029 36,041 21,615 14,426 £110,420 84,240 26, 180 26, 189 n26,0 8 141 o Includes £6, 180 loss on exchange. Of the gross receipts for 1914-15, £68,992 was from tramways and £40,338 from lighting. It was stated as of April 30, 1915, that the State and Federal and municipal governments were somewhat in arrears for street lighting, etc. Directors. — George M. Booth, chairman; W. Harold Tregonning, William C. Burton, James Mitchell, George Watson ; secretary, J3. W. Stacey, 9 Cloak Lane, London, B. C. Operating managers, J. G. White & Co. (Ltd.) (same ad- dress). Manager at Manaos: B. B. Kirk. MAPPIN & WEBB (BRAZIL) (LTD.). Registered 1911. Took over the Brazilian business of Mappin & Webb (Ltd.) in jewelry, gold, silverware, cutlery, etc. An extensive business is carried on. Capitalization. — Preference shares, £100,000 (cumulative, 6 per cent) ; ordi- nary shares, £15,000. The dividend on the preference shares is guaranteed until 1918 by Mappin & Webb (Ltd.). Preference shareholders may vote only under special circumstances. Income accounts. — Not made public except to shareholders. Directors. — W. J. Mappin, chairman ; W. D. Barlow, W. T. Haddock, H. J. Mappin, S. A. Mappin, H. Portlock; secretary, J. T. Boyes. Office (London) : 158-162 Oxford Street. MOINHO SANTA CRUZ. Does an extensive grain-milling and warehouse business ; sells a large amount of flour annually. Capitalization. — 3,000,000 milreis; par value of shares, 200 milreis. OURO PRETO GOLD MINES OF BRAZIL (LTD.). Incorporated 1884 to develop mining properties in Brazil ; reconstructed 1893 and again in 1914. Mines, which have been extensively developed, are located in the State of Minas Geraes. The Passagem Mining Estate (2 J square miles) and the Santa Anna Mines (1 square mile) are the principal properties. PARA ELECTRIC LIGHTING & RAILWAY CO. (LTD.). This ^company was incorporated in 1905 to acquire the street railway and electric lighting undertaking of the Companhia de Estrada de Ferro Paraense, of Para, Brazil. Concession expires December, 2004. In 1915 the company purchased at a cost of £6,389 the entire stock of the Para Gas Co. The terms of purchase entailed the guaranty of the 5 per cent interest and 1 per cent amortization per annum on the £24,900 outstanding debentures. The £6,389 paid for the £49,000 shares of the Gas Co. was distributed £5,000 in preference shares and the balance in cash. The length of the tramway lines is 34J miles. CAPITALIZATION, NOV. 30, 1915. Securities. Author- ized. Outstand- ing. £390,000 390,000 700,000 £325,000 390,000 1,480,000 1,383,399 o The first debenture stock is amortized by means of a sinking fund of one half per cent per ann^ m, which purchases the debenture stock up to 105 or draws same at that price. ^^ APPENDIXES. INCOME ACCOUNTS. 509 Year ended November 30— 1914 1915 £118,177 49,753 £128, 821 75,916 68,424 19,206 52,905 20,030 87,630 72,935 25,000 15,000 Note.— Gross receipts for 1914-15 were £243,483, as compared with £249,892 in 1913-14 and £302,103 in 1912-13. DIVIDENDS. Preference.. Ordinary... 1907-8 and 1908-9 Per cent. 1909-10 to 1912-13 Per cent. 1914-15 Per cent. OPERATING DATA. Items. 1913 1914 1915 Passengers carried Car miles run Consumers connected Units sold for light and power 23,254,258 3,172,069 3,890 2,371,997 19,339,989 2,974,422 3,951 2,430,834 18,382,979 2,773,800 4,099 2,418,804 Stores on hand November 30, 1915, £71,306; sundry debit balances, £42,316; British Government Treasury bills, £19,913; cash, £39,313; bank bills receiv- able, £38,500; sundry credit balances, £20,874; unclaimed dividends, £34,838. Directors. — Great Britain : Follett Holt, chairman ; Dr. Jose Paes de Carvalho (formerly president of the State of Para), F. M. Voules, Herbert Ansell, E. S. Baring-Gould, W. O. Burton, E. C. Chester, W. K. Whigham. At Para, Brazil : Dr. AugUsto Octaviano Pinto, Dr. Lucio Amorim Do Amaral. Secretary, E. A. Borel, 9 Cloak Lane, London, E. C. Manager in Para, W. Binns. Operating managers, J. G. White & Co. (Ltd.). PARA (MARAJO) ISLANDS RUBBER ESTATES. Registered 1910 to acquire rubber properties covering an area of more than 150,000 acres, situated on the island of Marajo, municipality of Anajas, State of Para, Brazil. It is stated that rubber trees exist on the property in very large numbers. Owing to the decline in the price of the commodity a receiver was appointed (February, 1915) on behalf of the debenture holders. Capitalization. — £20,000 preference shares, 6 per cent cumulative (par Is.) ; £100,000 ordinary shares (par 5s.) ; debentures, £7,380. Interest due January 1, 1915, was defaulted on this debenture issue. No statements are available later than 1912, when a profit of £1,502 was realized. Directors. — B. S. Straus, chairman; E. A. Greathed, the Right Hon. Sir W. Ridgeway ; receiver, John Skinner ; secretary, E. F. Johnson. Office : 6 Broad Street Place, London, E. C. PARA PUBLIC WORKS C"0. (LTD.). This company has the exclusive right to construct, equip, and work the public service of telephones In the city of Para (Belem), Brazil. As of December 31. 510 . INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. 1915, 762 telephones were in use, as compared with 676 on December 31, 1914, and 620 on December 31, 1913. The present installation has a capacity of 1,620 telephones. Formerly the company had a contract for the public cleaning of the city ; this was canceled for a consideration of £275,200 of municipal bonds, which have been disposed of by the company and the proceeds largely used to retire outstanding 7 per cent bonds. Capitalization. — December 31, 1915: Ordinary shares (par fl), £ 60,000; de- ferred shares, £2,000. After dividends have been paid on the ordinary shares up to 100 per cent the deferred shares will be entitled to dividends up to £2,000; in the event of liquidation both issues share ratably. INCOME ACCOUNTS (CALENDAE YEARS).. Items. 1915 Telephone subscriptions Expenses Para and London Balance carried down Balance from previous account Total surplus £8,872 £10, 753 7,247 £11,940 8,029 2,005 1,286 3,506 3,291 a 3, 911 6,797 3,291 6,797 10,708 oAfter allowing £1,080 loss on exchange. The £10,708 surplus as of December 31, 1915, was appropriated £1,500 depre- ciation on investments and £5,000 depreciation on installation ; the balance, £4,208, being carried to balance sheet. Of this balance, £2,100 (2J per cent) was paid as a dividend. Directors. — Francis M. Voules, chairman ; H. E. Col. Don Pedro Suarez, T. M. C. Steuart ; secretary, A. R. Bennett, 65 Bishopgate, London, E. O. PORT OF BAHIA. Incorporated 1902 to construct docks and port works at Bahia, Brazil. Property may be acquired by the Federal Government after December, 1922, under certain conditions. Capitalization. — 50,000,000 milreis shares; £3,000,000 5 per cent bonds (de- nominations £20 and £100), redeemable at par by December 31, 1972, by means of a sinking fund commencing 1923. These bonds were mostly disposed of in France. A total of 70 per cent of the net revenues of the port are to be applied to the bond interest and sinking fund. In the event of this sum proving in- sufficient the Federal Government has undertaken to impose a special ad valorem customs tax of 2 per cent gold upon all merchandise imported via this port. Should this sum prove insufficient it is to be increased until the necessary amount shall be raised. Interest was defaulted on the bonds September, 1914. Income account. — 1914: Net revenues, £143,949. Ofices : Bahia, Brazil, and Paris, France. RIO DE JANEIRO BENEDICTINE ORDER LOAN. These bonds, offered in London in 1909, bear interest at 5 per cent and are to be retired July 1, 1950, by means of a sinking fund, which began operations in 1915 and which will purchase bonds up to par or will draw them at that figure. Bonds are redeemable at the option of the Order at 103 per cent on six months' notice. The loan is for the total sum of £300,000. The bonds are the obligation of the monastery of Sao Bento, Rio de Janeiro, and are secured by lands on which are business and residential places. The value of the property is estimated at £600,000. The revenues from it during 1913 totaled £42,815. ST. JOHN DEL RET MINING CO. (LTD.). This company was chartered in 1830 to acquire gold-mining properties in Brazil. The company has operated the Morro Velho Mine continuously for about 85 years. A cave-in that occurred during 1886 necessitated a reconstruction of the property during 1887-88. A shaft has been driven for a depth of more than a mile. APPENDIXES. 511 CAPITALIZATION, FEBRUARY 29, 1916. Securities. Authorized. Out- standing. 10 per cent preference shares (par £1) £100,000 100,000 600,000 £100,000 10 per cent second preference shares (par £1) Ordinary shares (par £1) 546, 265 ol3,370 • Of this total £11,570 was redeemed prior to June 1, 1916. INCOME ACCOUNTS. Items. 1915-16o Bullion and silver produced, rents, etc Working expenses Balance carried to profit and loss account Net, including balance brought forward, etc Balance after London expenses, income tax, etc Amounts transferred to reserve, capital works account, etc Preference dividend, and tax Ordinary share dividend Production of gold and silver tons Total tonnage (2,240 pounds) crashed £439, 568 291,713 147,855 157, 331 137,344 60,000 10,813 6 54, 626 £450,934 286,214 164,720 176, 101 133, 951 60,000 11,750 6 64,626 199,234 191,500 201, 552 192,500 » Years ended Feb. 28 and 29. 6 10 per cent. Sundry debtors, February 29, 1916, £ 24,083 ; cash, £71,703 ; gold and silver in Brazil and in transit, £50,847; British Treasury bills (£40,000 since redeemed), £87,643 ; investments, at minimum prices, £115,351. Directors. — H. Percy Harris, chairman; J. F. Remnant, Sir Edw. Goulding, Col. H. Le Roy-Lewis, C. B., D. S. O. ; C. F. W. Kup, managing director ; acting secretary, F. V. Steward; superintendent at the mines, George Chalmers, Morro Velho, Brazil. London office : Finsbury House, Bloomfield Street, E. C. SAO PAULO GAS CO. (LTD.). Registered 1869. The company has a concession, expiring 1950, from the State of Sao Paulo. The company at the expiration of the concession will retain its property and will still have the right to furnish gas and its products. CAPITALIZATION, DECEMBER 31, 1914.o Securities. Authorized. Out- standing. 6 per cent preference shares, cumulative (par £10) , Ordinary shares (par £5) 5 per cent debentures due 1928 (par £50) 6 , Total £150, 000 350,000 125,000 £150,000 275,000 125,000 625,000 550,000 o Latest figures obtainable. 6 The debentures are secured by a first charge on the property and are redeemable at par at the com- pany's option. INCOME AND PROFIT AND LOSS ACCOUNTS (CALENDAR YEARS). Items. 1912 1913 1914 Brought forward from previous year Net earnings from operations in Brazil, etc. Total income London charges, income tax, interest, etc. («) £76,448 £48,860 65,069 £37,584 62,273 76, 448 16, 005 113,929 39, 569 99,857 Surplus Preference shares dividends. Ordinary dividends Transferred to reserve 60,443 69,000 cl3,750 74,360 69,000 616,500 11,276 64,459 69,000 "17,875 o The sum of £11,546 was brought forward from 1911. This sum is not included above. 6 6 per cent. c 5 per cent. i 6J per cent. 512 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. After, payment of the ordinary-shares dividend in 1914 a total of £ 37,584 was carried to the balance sheet. The balance sheet as of December 31, 1914, re- ported coal and stores on hand and in transit, £132 895; sundry debtors, £47,677; investments, £20,736; bills receivable, £12,143; cash, £56,729; loans payable, £139,513 ; sundry creditors, £29,545 ; general reserve fund, £125,000. Directors. — F. H. W. Hope; H. Sehulman. chairman; H. Malcolm Hubbard; secretary, G. H. Rogers. Office : 306 Caxton House, London, S. W. SAO PAULO RAILWAY CO. (LTD.). Organized in 1859 to construct a railroad between Sao Paulo and Santos, Brazil. Has a monopoly of the trade between these two cities. The Government may purchase the line in 1927 under certain conditions. The following data, unless otherwise indicated, show the status of the railway as of June 30, 1915: Location. — Main line extends 86.5 miles from Santos via Sao Paulo to Jundiahy, with a branch line to the town of Bragantina, 67 miles ; total mileage operated, 153.5. Santos, the greatest coffee port in the world, with a popula- tion of 75,000, is the shipping port for the important city of Sao Paulo (popula- tion nearly 500,000, second in size in Brazil). S5o Paulo is a great commercial and industrial city, with about 500 factories, whose working capital is estimated to be $20,000,000. The population of Jundiahy is about 20,000. The line from Santos to Sao Paulo and beyond is entirely double tracked. Equipment. — December 31, 1915 : Locomotives, 138 ; passenger cars, 209 ; freight cars, 4,028; miscellaneous cars, 122. Management. — A. J. Owen, superintendent; Vernon Hinde, secretary. Di- rectors: Lord Balfour, of Burleigh, chairman; O. R. .H. Bury, F. X. Chappie, John Gordon, Charles E. Johnston, Sir Gerard Smith. Semiannual meeting: Last Wednesday in April and October. General office : 111 Gresham House, Old Broad Street, London, England. Operating office: Sao Paulo, Brazil. Tonnage. — For the calendar year 1915, 2,526,726 tons of freight were trans- ported, as compared with 2,414,536 tons for 1915 and 3,239,909 for 1913. Coffee is the principal product carried, and practically the entire product of Brazil is shipped over this road. Income account. — For the half year ended December 31, 1915, the gross re- ceipts from all traffic sources were £1,016.732 ; operating expenses, £597,495 ; net receipts, £419,237; other income, £25,807; total net income, £445,045; in- terest, etc.. £56,530 ; surplus, £388,515 ; balance forward from preceding half year, £171,276 ; surplus available for dividends, etc., £559,792 ; preference, divi- dend for half year, £25,000 ; ordinary dividend, £150,000 ; income tax, £100,000 ; carried forward, £284,791. Train-mile earnings are the greatest in South America, and are generally in excess of the total reported by any steam railway in North America. Balance sheet. — The balance sheet as of June 30, 1915. showed cash, stores, bills receivable, and other current assets (including investments with a market value of £888,299), to a total of £2,518,844, as against current liabilities of £335,261. There was a reserve fund of £2,131,730, and an income-tax reserve of £79,607. In the income account for June 30, 1915, other deductions after fixed charges were for depreciation in value of investments during the year since July 1, 1914. Bonded debt. — £1,000,000 5£ per cent debenture stock ; £250,000 5 "per cent debenture stock ; £1,000,000 4 per cent debenture stock. Capital stock. — £1,000,000 5 per cent preference stock and £3,000,000 ordinary stock. Dividends.— 1901 jto 1906, 12 per cent ; 1907 to 1911, 13 per cent ; 1912 and 1913, 14 per cent; 1914 and 1915, 10 per cent (free of income tax). CHILE. AMELIA NITRATE CO. (LTD.). This company, one of the large nitrate producers of Chile, was registered 1896. The shares are owned approximately two-thirds in Great Britain and one-third in Germany. Nitrate, iodine, etc., are produced. Capitalization.— June 30, 1915 (latest obtainable) : Preference shares 6 per cent cumulative (par £100), £50,000; ordinary shares (par £10), £156 000- 5} per cent first-mortgage debentures (par £50), £120.000 (these debentures 'are repayable by sinking fund prior to January 1, 1920, by annual drawings at APPENDIXES. 513 103 per cent; approximately £ 100,000 outstanding August, 1916) ; 5i per cent 10-year debentures, £89,300 (original issue £100,000; balance redeemed). D ividends.— On preference shares : 1906-7, 48 per cent ; 1907-8, 27 per cent, liquidating all back dividends ; 1908-9 to 1915-16, 6 per cent per annum. Ordi- nary : 1907-8, 18 per cent ; 1908-9, 28 per cent ; 1909-10 and 1910-11, 8 per cent : 1911-12 and 1912-13, 9 per cent; 1913-14, 7 per cent; 1914-15, 7 per cent. INCOME ACCOUNTS. Items. 1912 1913 1914 1915 £72,460 571 £66, 680 618 £62,577 529 £57,796 13,210 Total 73,031 20,623 67,298 23,498 63,106 24, 135 71,006 24,854 52,408 43,800 38,971 46,152 1,332,357 1,220,543 1, 124, 112 992,968 Of balance for 1915, £31,140 was used for sinking fund, £3,000 for preference dividend, and £10,920 for ordinary dividend ; £426 was carried forward. Balance sheet. — June 30, 1915: Cash, £10,340; bills receivable, £22,618; re- mittances in transit, £53,571 ; stocks in hand, £145,827 ; furniture and fittings. £3,550 ; sundry creditors, £124,610 ; reserve account, £37,500. Directors. — Baron Bruno Schroder, chairman ; C. A. Bingel, Sir Walpole Greenwell ; secretary, C. A. Huni, F. C. I. S., 3 Finch Lane, London, E. C. ANGLO-CHILEAN PASTORAL CO. (LTD.). Registered 1904 to acquire until September, 1923, the right to a large tract of land located within the watershed of the Frias River, Chile. The property is 2,240 square miles in area and extends from the Pacific coast to the boundary with Argentina. Cattle, sheep, horses, and mules are raised. As of November, 1914 (latest report rendered), 28,613 sheep were owned (total wool clip for 1913-14, 112,795 pounds), as well as 8,141 head of cattle and 555 horses and mules. About 90 miles of property have been fenced. Capitalization. — April 30, 1914 (latest figures obtainable) : Shares author- ized (par £1) £120,000, outstanding £83,025; debentures, 10 per cent, authorized £20,000, outstanding £7,600 (remainder of authorized issue deposited as col lateral for sundry creditors). INCOME ACCOUNTS. Items. Year ended April 30- 1914 Sales of wool, live stock, and stores Expenses in Chile Net profit in Chile £8, 508 3,551 4,957 £11,428 3,903 7,525 Interest accrued on debentures as of April 30, 1914, £4,148. Directors. — Frederick William Kerr, chairman ; Alex. Henderson, Arnold Wethered ; secretary, G. M. O'B. Horsford, F. C. L S., 31 Budge Row, Cannon Street, London, B. C. Manager : D. H. Brand. CAKRIZAL SHARE TRUST (LTD.). Registered 1900. Owns £679,900 shares of the Sociedad Minas y Fundiciones de Carrizal (Chile), operating copper mines. Capitalization. — £110,000 shares authorized (par £1), £67,997 outstanding. Dividends.— 1905-6, ,6d. ; 1906-7, 8d.; 1907-8, 10d.; none since. 63018°— 18- -33 514 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Debit balance.— Year 1915: £270. Directors. — T. P. P. Powell, chairman; Sir H. W. Klrby, G. R. H. Wilson; secretary, H. J. Page, 21 Ironmonger Lane, London, E. O. CHILEAN STORES (GATH & CHAVES) (LTD.). Registered February, 1913, to take over the business of general stores and merchants in Chile, formerly carried on by the South American stores (Gath & Chaves) (Ltd.). CAPITALIZATION, JULY 31, 1915. Securities. Author- ized. Out- standing. Preference shares (par £1), entitled to 6 per cent per annum cumulative and 25 per cent of the surplus profits * Ordinary snares (par 10s.), entitled to 6 per cent per annum noncumulative and 75 per cent of the surplus profits Total capitalization £200,000 200,000 400,000 £131,000 200,000 331,000 INCOME ACCOUNTS. Items. Year ended July 31— Net profits in Chile Balance (after expenses) carried to balance sheet. Preference dividend Ordinary dividend Transferred to reserves £14,179 11,915 «7,860 4,055 £11,712 9,846 "7,860 »6,0O0 a 6 per cent. ' 3 per cent. Stock on hand and In transit July 31, 1915, £ 268,560 ; bills receivable, £ 29,000 ; cash, £4,814; sundry debtors and debit balances, £7,805; sundry creditors and credit balances, £51,790 ; reserves, £5,291. Directors. — Sir W. Capel Slaughter, chairman ; Georges Benard, G. L. Bevan, Lorenzo Chaves, Baron F. A. d'Erlanger, B. Nathan. Local board in Santiago de Chile: Adolpho Guerrero, chairman; Salvador Izquierdo, Luis Davila Lar- rain, Pablo Delia Valle. Secretary : George Frampton, 8 Crosby Square, Lon- don, E. C. CHILE TELEPHONE CO. Registered 1889, to acquire various telephone properties in Chile. Capitalization.— £330,000 (£360,000 authorized) shares, par £5. Dividends.— 1906-7 to 1909-10, 8 per cent; 1910-11, 7 per cent and 50 per cent in shares; 1911-12, 8 per cent, subject to tax; 1912-13 to 1916-17; 8 per cent each, tax free. LAGUNAS SYNDICATE (LTD.). This company was registered in 1889 to acquire nitrate properties in the Prov ince of Tarapaca, Chile. Capitalization— June 30, 1917: Shares (par £1), £550,000; debenture bonds, £394,380 ; outstanding balance of £547,130, 5 per cent, to be retired at par up to 1923, interest payable January and July 15. Dividends.— 1911,. 6 per cent ; 1911-12, 5 per cent ; 1912-13, 4 per cent ; none since. Income account.— Year ended Juna 30, 1917: Gross profits, £58138" net profits after charges, £32,623. The latter sum was transferred to sinking fund The cost of the works and property, less sinking fund, was £849 698 and the total assets amounted to £1,188,294. PACIFIC & EUROPEAN TELEGRAPH CO. (LTD.). Registered 1892. Operates a through telegraph line from Valparaiso to San- tiago, Chile, and to Buenos Aires, Argentina ; completed 1894. APPENDIXES. 515 Capitalization.— £100,000 shares, all held by the Western Telegraph Oo. and the West Coast Telegraph Co. These two companies guarantee an issue of £ 68,400 4 per cent mortgage debentures, due 1942 (original issue, £100,000, call- able at 110). Original offering price of debentures, 102 per cent; interest due June and December. Income account. — Not made public. Directors. — Sir A. J. W. Cappel, K. C. I. B., chairman ; B. J. W. Barry, Hon. A. C. Brodrick, Sir J. Denison-Pender. Office : Electra House, Finsbury Pave- ment, London, E. C. PAN DE AZUCAR NITRATE CO. (LTD.). Registered 1901. Owns Pan de Azucar nitrate properties located in Tarapaca, Chile. Capitalization. — £110,000 shares, par £5. Dividends.— 1903-4 to 1907-8, 12 per cent yearly ; 1908-9, 1909-10, and 1910- 11, 6 per cent ; 1911-12, 15 per cent ; 1912-13, 18 per cent ; 1913-14, 8 per cent ; 1914-15, none. Income account. — Year ended June 30, 1915 : Loss from operation, London expenses, etc., £15,421. This compares with a usually large profit, and was due to abnormal war conditions. Directors. — Hon. Herbert C. Gibbs, chairman ; Brien Cokayne, Andrew Geddes, H. W. Sillem, J. I. Smail ; acting secretary, A. H. Short, 25 Old Broad Street, London, E. C. PODEROSA MINING CO. (LTD.). Registered 1908. Acquired a copper property, comprising 455 acres, located in Collahuasi district, Province of Tarapaca, Chile. Capitalization. — £500,000 ; par £1. Dividends.— 5s. paid 1909 ; none since. Income account. — Tear ended December 31, 1915 (rendered July 31, 1916) : Net receipts from sales of ore, interest, etc., £60,033 ; net after mining expenses, £21,588 ; net surplus after depreciation of buildings, etc., £17,025 ; balance at debit of the revenue account, £3,278, as compared with £20,304 at close of 1914. Net receipts for 1914 were £42,382 ; the net operating loss was £5,794. During 1915, 3,734 tons of copper ore, of an average assay of 21.86 per cent copper and 5.93 ounces silver per ton, were shipped to the smelter — this com- paring with 5,289 tons, assaying 18.23 per cent copper and 3.95 ounces silver, in 1914 and 7,793 tons in 1913. Directors. — Charles Fearn, chairman ;" William J. Barnett, Vicente Echeverria, Lionel W. Harris ; secretary, F. W. Bishop, F. C. I. S. Office : 9 New Broad Street, London. Mine manager : J. H. Ivey, Antof agasta, Chile. VALPARAISO (CITY) WATER-BOARD 51 PER CENT BONDS. This issue, £250,000, was floated in London during 1912 by J. Henry Schroder & Co., of London, at 99 per cent. Bonds are to bearer and in denominations of £100, interest payable April and October. A cumulative sinking fund will re- deem the entire issue on October 1, 1940. This sinking fund buys bonds in the open market at below par or draws them at that figure. The proceeds of the issue were used to extend and improve the water supply of the city. The issue is unconditionally guaranteed both as to principal and interest by the Govern- ment of Chile and is free from any taxes in that Republic. The waterworks are operated by a board consisting of the provincial administrator of Valpa- raiso, two citizens, and two members of the municipality, one appointed by the President and the other by the municipality. While these bonds are not actually the obligation of the city of Valparaiso, they may for convenience be classified as municipal bonds. This issue is officially quoted on the London Stock Exchange. WEST COAST OF AMERICA TELEGRAPH CO. This company is a reorganization (year 1897) of a previous company in- corporated 1877 to take over telegraph lines along the west coast of South America. The Western Telegraph Co. owns a large block of the stock. 516 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Capitalization. — £112,520 shares (par £10) ; £150,000 4 per cent debentures, re- payable at par January 1, 1917 (par £100) ; £20,000 4 per cent noncumulative income debentures. This company, jointly with the Western Telegraph Co., guarantees £100,000 4 per cent debentures of the Pacific & European Tele- graph Co. Dividends. — 2J per cent annually, 1906 to 1912 ; none since. INCOME ACCOUNTS. Items. 1914 1915 £61,129 43,054 £65, 476 46,216 18,075 19,260 Including £1,995 brought forward from December 31, 1914, the total net in- come was £20,778; interest on debentures (including 4 per cent income bonds), £6,800; transferred to general reserve fund. £5,000; provision on account of investment fluctuations, £6,000; balance, £2,978. Reserve fund investments as of December 31, 1915 (marketable securities), were valued at £78,341, less £16,000 provision on account of investment fluctuations. Current assets and stores, £44,603; current liabilities, £11,619. Directors. — Sir John Denison-Pender, K. C. M. 6., chairman ; Sir Albert J. Leppoc Cappel, K. C. I. E., Francis Alexander Johnston ; secretary, Frederick L. Robinson. Office: Electra House, Finsbury Pavement, London, E. C. QUOTATIONS AND DIVIDENDS OF SECURITIES. The following table, from the official list of the Valparaiso Stock Exchange, shows the quotations and dividend records of Chilean securities, as of April 20, 1917. The sign $ is used to indicate Chilean paper pesos, worth approxi- mately $0.2825 on April 1, 1918. Companies. Chile Hipotecario de Chile Santiago Espanol de Chile Hipotecario de Valparaiso. Naeional Kepublica Italiano PASTORAL AND LIVE-STOCK COM- PANIES. TierradelFuego... Chile & Argentina. . Aysen Laguna Blanca Gente Grande NITRATE COMPANIES. Antofagasta LaTJnidn F. C. de Agua Santa. Lastenia Boquete Aurrera Loa Perseveraneia Capital. Value of share. Nominal. 380,000,000 $5,000,000 53,000,000 540,000,000 $(,000,000 ^25,000,000 114,000,000 $10,000,000 £1,800,000 £475,000 £100,000 £195,000 £85,000 {16,000,000 $3,000,000 £600,000 £500,000 £800,000 £125,000 £650,000 $2,800,000 Nora inal. $40,000,000 $6,000,000 $6,000,000 $30,000,000 $2,000,000 $16,000,000 ;$14,000,000 $10,000,000 £1,800,000 £475,000 £100,000 £195,000 £85,000 $16,000,000 $3,000,000 £600,000 £500,000 £800,000 £125,000 £650,000 $2,800,000 200 200 100 100 100 100 100 100 Paid in. 100 200 100 100 100 40 100 100 Dividends (total). Per cent. 12 15 20 14 12 10 15 15 25 26 22J Per cent. 10 10 5 80 20 4 7i 2} $6 3 Last. Per cent. 8 10 7 6 5 6 6} 4} 10 5 10 5 20 2 $2 4 3 $2 5 7J Mart-nt price. 206 518 136 148 115 49i 413 77§ 7i 47 72 84 148} 12 - 250 27 50 80 APPENDIXES. 5.17 Companies. Capital. Nominal. Paid in. Value of share. Nom- inal, Paid Dividends (total). 1916 1917 Last. Market price. MINING COMPANIES. Gatico Curanilahue Antequera Poderosa de Collahuasi. Caylloma Llallagua (Bolivia) Taltal Lota & Coronel Oruro " Oploca Colquiri LasVacas GAS COMPANIES. Valparaiso . . Conception.. Santiago INSURANCE COMPANIES. La Alemana America La Central Chilena Consolidada. . La Comercial LaEspanola La Francesa Franco-Chilena International Chile. . Laltalia LaNacional La Protectora La Union Chilena La Previsora MAEITIME SHIPPING COMPANIES. Sad-Americana de Vapores., Compania de Diques MISCELLANEOUS. Cervecerias Unidas Azucar de Vina del Mar Azucar de Penco Buques y Maderas Maestranza y Galvanize ion. , Compania Industrial Imprentas TJnidas Molinera Globo Pan y Galletas Hucke Cia. Telegrafo Comercial Maderera Malvoa Chilena de Tabacos , Cemento Melon Puntade Lobos , £275,000 $9,000,000 £70,000 £500,000 £132,000 £425,000 81,000,000 $18,000,000 $6,000,000 £140,000 $2,000,000 $1,500,000 £500,000 $4,000,000 $400,000 $9,000,000 000,000 000,000 000,000 000,000 000,000 000,000 000,000 000,000 000,000 500,000 000,000 000,000 000,000 000,000 $7,500,000 $800,000 $14,000,000 £235,000 £225,000 $2,500,000 £120,000 $2,500,020 $5,000,000 $5,000,000 $250,000 $300,000 $4,000,000 $7,500,000 £210,000 $900,000 £275,000 $9,000,000 £70,000 £500,000 £132,000 £425,000 $1,000,000 $18,000,000 $6,000,000 £140,000 $2,000,000 $1,500,000 £500,000 $4,000,000 $400,000 $9,000,000 $200,000 $200,000 $1,000,000 $2,000,000 $300,000 $200,000 $200,000 $560,000 $1,000,000 $500,000 $100,000 $150,000 $200,000 $200,000 $7,500,000 $800,000 $14,000,000 £535,000 £225,000 $3,500,000 £120,000 $2,042,400 $5,000,000 $5,000,000 $250,000 $3,000,000 $4,000,000 $7,500,000 £210,000 $900,000 1 100 0.4 5 1 1 10 100 20 1 10 10 20 500 250 50 25 500 100 500 25 25 500 500 500 500 10 100 100 100 1 1 50 1 60 100 100 20 25 20 20 1 50 1 100 0.4 5 1 1 10 100 20 1 10 10 20 50 25 25 25 75 10 50 14 25 100 25 25 50 10 100 100 100 1 1 50 1 60 100 100 20 25 20 20 1 50 Per cent. $2 Per cent. $2 19J 12J 45 30 20 13.3 16 13.33 100 8 12.1 34 20 200 140 100 10 15 $8.65 $2.10 $9.85 $8.45 10 3 16.66 16.66 2 75 14 3i Per cent. $2 $5 50 10 7.1 14 50 20 50 15 $2.10 $3 3 $2 16.66 2 6 6 7 3 10 5 4 COLOMBIA. BUCARAMANGA GOLD & GENERAL MINING CO. (LTD.). Registered in 1899 in Paris. Owns mines in Republic of Colombia. Develop- ment work is in progress. Capitalization. — £155,030 shares (par £1). Income account. — None yet published. Secretary, T. E. Ingledew, 60 Watling Street, London, E. O. COLOMBIAN MINING & EXPLORATION CO. (LTD.). Registered 1908 to acquire, at an annual rental of £3,200, gold and silver mining rights, covering 900 square miles in Supia and Marmato districts, 518 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Colombia. Estimated ore reserve, 1914, about 136,000 tons. Receiver appointed March 19, 1915. Earnings year ended March 31, 1914, £37,241. Capitalization. — £450,000 shares, par £1, and £50,000 6 per cent debentures, interest March and September. Bonds convertible into shares to December 31, 1917, at 10s. per share. Officers. — Secretary, T. E. Pascoe, office 6 Surrey Street, Strand, London, E. G. Manager, N. L. Jenks, Marmato Mines, Medellin, Colombia. COLOMBIAN NORTHERN RAILWAY (LTD.). Registered 1898. Holds a concession from the Colombian Government, expir- ing December, 1983, for the construction and operation of a line of railway extending from Bogota northward to Nemocon (about 37 miles). The company held a concession for the extension of the line to Chiquinoquira, about 64 miles farther. This concession has been disposed of to the Colombian Central Rail- way, in which company the Colombian Northern holds an interest consisting of shares and £20,OOC debenture stock (6 per cent). Capitalization. — Ordinary shares, £300,000 (par £10) ; 5 per cent first- mortgage debenture stock, £180,000 ; reserves, June 30, 1915, £27,000, including £9,000 against advances to the Colombian Central Railway. Stores in hand, £13,297 ; sundry debtors, £12,314 ; advances to Colombian Central Railway (secured by £20,000 debenture stock), £17,748; investments (at market), £12,628; remittances in transit, £5,174; cash, £10,435; sundry creditors, £6,898 ; debenture fund, £3,172. The following figures show the working results (years ended June 30) : Gross receipts— 1914-15, £53,864 8s. 2d. ; 1913-14, £53,998 15s. 5d. ; decrease, £134 7s. 3d. Working expenses— 1914-15, £17,149 14s. lOd. ; 1913-14, £14,782 6s. 7d.; increase, £2,367 8s. 3d. Net receipts— 1914-15, £36,714 13s. 4d. ; 1913-14, £39,216 8s. lOd. ; decrease, £2,501 15s. 6d. The percentage of the working expenses for the year 1914-15 was 31.84 as compared with 27.37 for the previous year. Under the terms of the trust deed the company had in 1915-16 to create a fund for the redemption of the debentures, by setting aside 10 per cent of the net profits. In conformity therewith, there has been placed to such fund the amount of £3,172 7s. 9d. After writing off to revenue account the amount of £1,274 13s. lOd. prelim- inary expenses, and passing the amount of £3,000 to reserve account, the balance of net revenue is £43,514 lis. Id. Dividend on the shares of 4 per cent paid on December 1, 1915, amounted to £12,000, leaving a balance of £31,514 lis. Id. to carry forward. CONSOLIDATED COLOMBIA PLATINUM & GOLD MINES (LTD.). Registered November 17, 1915. Acquired properties of the Colombia Gold & Platinum Syndicate (Ltd.) and the Colombian Goldfields (Ltd.). A very large area is. covered, alluvial and dredging. Capitalization. — £100,000 shares, par £1. Directors.— E. Cattanach, S. T. Cohn, H. Edwards, T. J. Ive, G. H. Short; secretary, W. E. Hollodge, 49-51 Eastcheap, London, E. C. ENGLISH SAN ANDRES GOLD MINES (LTD.). Registered 1909. Controls the San Andres, San Cayetano, Penoles, and other gold-mining properties in Colombia. Capitalization. — £35,000 shares, par £1, all fully paid. Bullion sales year ended August 31, 1914, £3,906. Directors. — M. Devenish, chairman ; F. Varley ; manager, W. E. Rowlands ; secretary, H. T. Butcher, 14 Copthall Avenue, London, E. C. FRONTINO & BOLIVIA GOLD MINING CO. (LTD.). Registered 1911. Mining rights acquired over 12 square miles and surface rights over about 40 square miles in the Republic of Colombia. Capitalization. — £23,390 preference shares and £140,000 ordinary shares (par £1) ; £45,138 19 per cent debenture stock due 1921. Preference shares are en- titled to 10 per cent per .annum cumulative in priority to the ordinary shares. After 19 per cent is paid on the latter class, both issues share pro rata in all further dividends. Pull dividends are paid on the preference shares; 10 per cent was paid on the ordinary shares in 1915. APPENDIXES. 519 Income account. — Tear ended June 30, 1915 (submitted December, 1915) : Profit (after depreciation), £20,891; net income (including balance brought forward and interest received), £22,358; debenture interest, £4,514; surplu <, £17,844; dividends, £16,359; balance, £1,505. Profit, 1914, £10,877. Shares listed on London Stock Exchange. Directors. — S. W. Stephens, chairman ; T. H. Alexander, H. P. Harris, M. P., R. C. Lyell, Oapt. H. O'Neill, M. P. ; secretary, J. J. Truran, Gresham House, Old Broad Street, London, E. C. Manager, A. N. Mackey, A. E. S. M., La Salada, Colombia. . NECHI MINES (LTD.). Registered 1914. Acquired and are working ,the San Francisco alluvial gold properties situated on the River Nechi, at Zaragoza, Department of Antioquia, Colombia. The mines adjoin the properties of the Pato Mines (Ltd.). Con- sideration, £20,000 cash and £70,000 shares paid to the Oroville Dredging Co. (which see). The property consists of approximately 400 acres of gold-bear- ing lands. About one-sixth of this area has been tested and indicates a yield of about $5,000,000 from 6,855,900 cubic yards. The costs are estimated at $0.09 per cubic yard. The remainder of the property is also expected to pro- duce good results. A dredge has commenced work. Capitalization. — £140,000 preference .shares (par £1) and £70,000 ordinary shares (par 10s.). The preference shares were offered to shareholders of the Oroville Dredging Co. (Ltd.) pro rata. These shares are entitled to all divi- dends until each shareholder shall receive the amount originally paid therefor ; thereafter 25 per cent per annum in priority to the ordinary shares. Property expenditure to June 30, 1915, £148,800. Prices of preference shares, 1915. — Highest, 15s. ; lowest, 8s. Directors. — F. W. Baker, chairman ; Maj. F. D. Behrend, H. D. Boyle, A. S. Elmore, T. J. Hoover; secretary, H. Richards, Salisbury House, London, E. C. Manager at mine, N. Dickerman. OROVILLE DREDGING CO. (LTD.). Registered 1909. Controls, among other mines, the Pato Mines of Colombia. Capitalization. — £700,000 shares (par £1). Dividends. — 1914 and 1915, 10 per cent per annum. Secretary, H. Richards, 441 Salisbury House, London, E. C. ECUADOR. ANCON OIL CO. OF ECUADOR. Registered 1910. Acquired 4,000 acres of oil-bearing lands located at Santa ■. Elena, Province of Guayaquil, Ecuador. Oil found at shallow depths. Opera- tions temporarily suspended in 1913 owing to lack of funds. The shareholders of this company during 1913 subscribed for the £4,565 outstanding shares of the Ecuador Drilling Co. Capitalization. — Authorized, £250,000 (par £1) ; outstanding, £81,060. No accounts have been rendered recently. The wells are presumably idle. Directors. — J. G. Raphael, chairman; L'. Clerc, E. M. Court, E. Paix, J. J. de Vcaza; secretary, M. Balmuth, 6 Broad Street Place, London, E. C. ZARUMA MINING CORPORATION (LTD.) Registered 1913. Acquired the Minas Nuevas claims, 1,838 acres, located in the Zaruma district, Province of El Oro, Ecuador, 32 miles from the Pacific Ocean. On the two claims it is estimated that 78,000 tons of ore have been blocked out and 73,000 tons partly developed. Estimated value of ore, £10 to £12 per ton. A concentration plant and a hydroelectric plant are being constructed. Capitalisation. — £110,000 preferred ordinary shares (par £1) and £10,000 deferred shares (par Is.) ; mortgage, £7,572. The preferred shares are entitled to 10 per cent per annum (noncumulative) and to one-half of additional profits. Accounts not yet published. Directors. — J. Rey, chairman; C. Brault, P. J. E. E. Chambost, A. E. Lund, E. Saiadin, J. Ville ; secretary, J. C. Stampfer, 156 Palace Chambers, Westmin- ster, London, S. W. 520 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. BRITISH GUIANA. CONSOLIDATED RUBBER & BALATA ESTATES (LTD.). Registered September, 1909, to acquire concessions for collecting and produc- ing rubber and balata in the colony of British Guiana. Concessions cover 35,000 square miles. Capitalization. — Authorized : Seven per cent cumulative participating prefer- ence shares, £240,000; £10,000 ordinary stock. Practically all of this stock is outstanding. Dividends and earnings. — Full dividends of 7 per £ent per annum were paid September, 1909. to September, 1912, on the preference shares. In May, 1915, 3£ per cent was paid, leaving 15J per cent back dividends unpaid. . A dividend of 16? per cent was paid on the ordinary stock in 1911. Profits.— 1914, £11,978; 1913, £262. Production.— 1914, 1,076,067 pounds: 1913, 899,993 pounds. Directors. — R. Taylor, chairman ; Henry Shields. H. A. Franklin, A. S. Col- lard, L. Oury ; secretary, James Edwards, 80 Bishopsgate, London, E. C. DEMERARA & COVERDEN PRODUCE CO. (LTD.). Registered August, 1912, as a consolidation of the Coverden Rubber & Produce Co. (Ltd.) and the Demerara Rubber Co. (Ltd.), owning upward of 3.000 acres of rubber, balata, and gum lands and having rights to gather these commodities elsewhere. Capitalization. — £275,296 shares ; par, 2s. No dividends. Secretary : H. M. Graham, 147 Leadenhall Street, London. GUIANA GOLD CO. (LTD.). Registered 1905. Successor to the British Guiana Exploration Co. Owns four dredges on River Conawaruk. Gold production : 1912-13, 9,162 ounces ; 1913-14, 7,407 ounces ; 1914-15, 8,342 ounces. Capitalization. — £50.000 shares (par £1). Dividends. — 1908-9 to 1911-12, inclusive, 10 per cent per annum; 1912-13, 10 per cent plus 5 per cent extra ; 1913-14, 7i per cent ; 1914-15, 7£ per cent. Reserve. £2,000. Surplus, 1914-15 (after depreciation), £4,150. Secretary : J. Peters, 14 Devonshire Square, London, E. C. Mine manager : J. Henderson, St. Mary's Camp, British Guiana. DUTCH GUIANA. VAN EMDEN GOLD MINES (LTD.). Registered 1912 to acquire leases until 1941 of 12,500 acres of alluvial and quartz gold-mining properties situated in Dutch Guiana. Sluices are being erected and development work is being carried on.. The properties are known as the Lesser Mountain concessions and are about 150 miles southeast of Para- maribo, the capital. Capitalization. — £30,000 shares, par 5s. Income accounts. — Not yet rendered. Balance sheet as of September 30, 1914, showed preliminary and development expenses, £5,915 ; bills receivable, £5,864. Directors. — A. R. Clements, Paramaribo, Dutch Guiana, and F. R. Marshall, London. Offices : Paramaribo and 23 Philpot Lane, London, E. C. PERU. APORAMA GOLDFIELDS (LTD.). Registered 1910. Acquired alluvial rights on gold placer deposits, covering an area of 1 ,277 acres, located near the Hauri Hauri River, Province of Sandia, Peru. Company reached production stage just prior to the declaration of war in Europe, which prevented the raising of further capital. In consideration of constructing and keeping in repair the road leading to the mine, the company will receive about 220,000 acres of land from the Government. Property was leased to J. Chaorez, of Lima, Peru, at a rental of all taxes and 25 per cent of the net profits. Capitalization. — £40,000 preference shares and £260,000 ordinary shares authorized, latter issue outstanding. Preference stock, when issued, will be APPENDIXES. 521 entitled to 2 per cent per annum and will share with ordinary stock in further dividends. Loans and bills payable December 31, 1914, £33,458. Directors.— Capt. W. B. McTaggart, chairman ; J. F. 1). Kowden, M. Chavel, M. Rhys Jones ; secretary, J. Stap. Office : 1 Broad Street Place, London, E. O. BACKUS & JOHNSTON BREWERY CO. Registered 1889 to take over the brewery and ice business of Backus & Johnston at Lima, Peru. Capitalization. — Authorized and outstanding: Ordinary stock (par £10), £110,000; founders' shares, £100. The ordinary stock is entitled to 7 per cent per annum, cumulative, and to one-half the balance of profits. In addition, £88,400 5 per cent first debenture stock and £65,000 7 per cent income' debenture stock is outstanding. Dividends. — On ordinary stock : 1908-9, 5 per cent ; 1909-10, 7 per cent ; 1910-11, 8 per cent; 1911-12, 9£ per cent; 1912-13 and 1913-14, 7 per cent; 1914-15, none. Income account. — Year ended March 31, 1915: Gross profits, £17,888 (this is a much smaller amount than for previous year and reflects war conditions). After all expenses, interest payments, and £3,000 depreciation written off, the surplus was £4,863 ; including £2,314 carried forward, the surplus was £7,177. From this surplus £4,550 was deducted account of interest on income bonds. Directors. — J. Lloyd, chairman ; F. W. Bishop, managing director ; W. F. Leese, J. Guthrie Reed, H. W. Sillem, all of London; H. Mason and J. Reed, Lima, Peru ; secretary, F. W. Bishop, London. Office : 9 New Broad Street, London, B. C., and Lima, Peru. CERRO DE PASCO COPPER CORPORATION. The Cerro de Pasco Copper Corporation was incorporated in New York Octo- ber 26. 1915, as the successor to the Cerro de Pasco Investment Co., controlling the Cerro de Pasco Mining Co., the Cerro de Pasco Railway Co., and the Moro- cocha Mining Co. The holding company carried on its books assets valued at $38,632,439, including $3,429,821 cash, $1,600,930 accounts receivable, $3,442,965 copper, gold, and silver on hand, $724,692 stocks of other companies, and $2S,- 300,282 cost of properties. There was a book surplus, as of October 31, 1916, of $14,437,500. Capitalization. — The authorized capitalization of this corporation consists of 1,000,000 shares of no par value, of which 666,666 are outstanding in the hands of the public and the balance reserved to be issued to holders of the $10,000,000 10-year 6 per cent convertible bonds at the ratio of 33J shares of stock for each $1,000 bonds. Property. — The property of the Cerro de Pasco Mining Co., which is con- trolled, consists of 730 mineral claims and 108 coal-mining claims. Ore re- serves at these mines exceed 3,000,000 tons of copper ore, which figure, it is ex- pected, will be considerably exceeded following further development work. It is estimated that this ore contains 253,452,000 pounds of copper and 21,745,000 ounces of silver — also gold. The coal reserves are estimated at more than 3,000,000 tons. The Morococha mine is located about 100 miles from the Cerro de Pasco. It is a large producer. Dividends.- — Dividend payments for a portion of 1916 were at the rate of $1 per quarter ; in March, 1917, the rate was $1 regular and $0.50 extra. Production is running (1917) at the rate of about 74,000,000 pounds per an- num, as compared with 71,000,000 pounds in 1916, 48,000,000 pounds in 1915, 42,000,000 pounds in 1914, 43,860,000 pounds in 1913, and 20,258,689 pounds in 1907. Income account. — The income account for the 10 months ended October 31, 1916, showed sales of copper, silver, gold, etc., $19,718,164 ; revenue from railway, $280,348 ; total income, including other income, $23,697,556 ; operating expenses (including other expenses), $14,824,977; surplus, $8,872,579. The interest on bonds requires $600,000 per year. The office of this company is at 15 Broad Street, New York ; the mine office at Cerro de Pasco, Peru. An office is also maintained at Lima, Peru. CHIMBOTE COAL & HARBOUR CO. (LTD.). Registered 1908. Acquired a concession to construct a line of railway be- tween the port of Chimbote (one of the best harbors in Peru) inland through 522 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. a rich mining country, the total length to be approximately 150 miles. A por- tion of this line has been completed or graded, but work has been held up owing to difficulties between the company and the Peruvian Government. The company owns a majority of the shares of the Ohimbote Mole Co. Capitalization.— Authorized, £200,000 shares, par £1, of which £150,000 (approximately) are outstanding; loans, £25,000. Directors. — R. Taylor, chairman; F. Bocerra; secretary, R. Goode. Office: 16 Gracechurch Street', London, B. O. FERROBAMBA (LTD.). Registered 1909. Acquired the Ferrobamba, Copper Queen, Bonanzas, Char- eas, and other copper claims in the district of Ferrobamba, Province of Coto- bambas, Department of Apurimac, Peru (not far from Cuzco). Capitalization.— £120,000 ordinary shares (par £1) ; £30,000 priority shares (par 10s.). The priority shares were sold at par and are entitled to dividends up to 15s. per share in priority to ordinary shares, and thereafter rank as ordinary shares. The company estimates ore in mines at upward of 12,000,000 tons, valued at about £28,000,000. Mine closed down in 1912 owing to lack of working capital. Secretary: F. F. Fuller, Salisbury House, London, E. C. LAGUNITOS OIL CO. (LTD.). Registered 1910. Acquired an area of 4 square miles at Lagovista, about 11 miles from the port of Talara, Peru, under a lease until 1945. The lessor is the London & Pacific Petroleum Co. In 1913 about 4 square miles of addi- tional property was acquired. A light railway connects the property with another railway running to Talara. A large amount of drilling has been done, and the property is now on a full operative basis. During 1914 the property was acquired by the International Petroleum Co., one of the Standard Oil group. In 1916 the Lagunitos Oil Co. (Ltd.) was dissolved and the under- taking assumed by the International Petroleum Co. Capitalization. — The capitalization of the company prior to the dissolution consisted of £90,000 preference and £200,000 ordinary. In 1913-14 37i per cent was paid on the preference shares and in 1914-15 20 per cent. INCOME ACCOUNTS. Items. 1913-14 1914-15 £45,870 25,955 19,915 18,489 2,489 £35,344 17,183 18,161 18,000 2,650 39,650 41,930 LIMA RAILWAYS (LTD.). This company was incorporated in 1865 to work two Short steam railway lines, total mileage 17J, in the Republic of Peru. At the present time the lines are being operated by both steam and electricity. In 1907 the properties were leased until 1952 to the Empress E16ctricas Asociadas. Capitalization. — December 31, 1915 : Share capital, 40,000 shares of £10 each, £400,000 ; debenture stock, 5 per cent, amount issued £100,000, outstand- ing £52,983 (balance redeemed through sinking-fund operations). INCOME ACCOUNTS (CALENDAR YEARS). Items. Receipts from reatal, Chorrillos agreement, etc Balance to net revenues after deducting Peruvian and London expenses Net, including balance brought forward, etc Interest, sinking fund, income tax, etc Surplus Dividends 1J percent. £15,628 11,535 11,698 11, 743 -45 £14,956 12,237 12, 515 5,465 7,050 6,000 £14,592 11, 740 13,222 5,307 7,915 6,000 £16,308 13,802 16,176 8,839 7,337 6,000 APPENDIXES. 523 Rolling stock on hand April 25, 1913 (latest figures obtainable) : 27 loco- motives and Renders ; 65 passenger coaches and tramcars ; 300 freight-train cars. Directors. — Lt. Col. A. Brooke, chairman; Edw. W. Lane, Samuel Wat- kinson, Arthur H. Bartlett ; secretary, Frederick G. Curtis, F. C. I. S. ; repre- sentative in Peru (at Lima), B. J. Smith. London office: 23 College Hill, E. C. Lima office: 225 Calle Higuera. LONDON & PACIFIC PETROLEUM CO. Registered 1889. Leased until 1988 large petroleum properties in the Province of Paita, Peru. Considerable development work has been carried on ; a refinery, storage tanks, a railroad, pipe lines, and a fleet of tank steamers have been provided. This property in 1914-15 passed to the control of the International Petroleum Co. (controlled by Standard Oil Co. interests). Capitalization. — £1,000,000 shares (par £10). Dividends.— 1911, 6 per cent; 1912, 20 per cent; 1913, 22 per cent; 1914, 10 per cent. INCOME ACCOUNTS. Items. Net profits . . Depreciation Surplus Dividend... 1913 £161,252 42,252 119,000 60,000 1914 £176,730 45, 530 131,200 51, 032 Balance transferred to reserve or written off of various accounts. NEW CHUQUITAMBO GOLD MINES (LTD.). Registered 1907. Owns 142 acres of gold-mining property located in the district of Cerro de Pasco, Peru, and water rights over the Taya River and affluents. A tramway, a 40-stamp battery, and a cyanide plant have been constructed. Crushings commenced in 1907. Production : 1912-13, 23,673 tons ; 1913-J.4, 20,800 tons ; 1914-15, 19,556 tons. Capitalization. — £50,000 shares authorized; £44,800 outstanding (par £1). Profits— 1912-13, £2,320; 1913-14, £3,506; 1914-15, £2,200. Gold output, 1914-15, £12,999. Dividends. — 1907-8, 6 per cent; 1908-9, 11 per cent; 1909-10, 5 per cent; 1910-11 and 1911-12, none ; 1912-13, 5 per cent ; 1913-14, 3J per cent ; 1914-15, 5 per cent. Directors. — F. Lowy, chairman and managing director ; F. H. McCardie, F. E. Macfadyen ; secretary, W. Holt. Office : Salisbury House, London, E. C. Manager : S. Bonany, Cerro de Pasco, Peru. PERUVIAN CONSOLIDATED GOLD TRUST. Registered 1911, as the Patez and Parcoy Syndicate (Ltd.), to acquire 20 mining claims at Parcoy, Peru. A plant has been erected and the company has commenced development work. Capitalization.— Authorized, £80,000; issued, £76,047. Income accounts. — Not yet published. Directors.— S. R. Adcock, J. S. Enright, H. W. Whyte, A. S. Plews; general manager, A. G. Plews; secretary, E. T. Evans. Office: 11 and 12 Finsbury Square, London, E. C. SAN ANTONIO DE ESQUILACHE MINES (LTD.). Registered November, 1914. Acquired the San Antonio de Esquilache gold, silver, and lead mines (area 365 acres), located near Puno, Peru, on the Peruvian Southern Railway and Lake Titicaca; £1,500 cash and £208,700 shares. Capitalization.— £250,000 shares authorized (par £1) ; approximately £215,000 outstanding. Ore is being shipped, but report has not yet been issued. Directors.— H. J. Hardy, chairman ; W. Bartlett, P. Belin, jr., Sir V. Chirol, Capt. R. Johnstone-Stirling, S. F. Edge, J. G. Green, W. S. Payne; secretary, H. C. Rogers. Office : 13 St. Helen's Place, London, E. C. 524 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. QUOTATIONS AND DIVIDENDS OF SECURITIES. The following table, from the official quotation sheet, shows the quotations and recent dividends of securities listed on the Lima (Peru) Stock Exchange March 15, 1917. It should be noted that the libra, or Peruvian pound, in which the figures for capitalization and market value are expressed, is equivalent to the pound stering {$4.8665 in United States currency). Libra=10 soles, sol=100 centavos. The abbreviation Lp. represents the Peruvian pound. OBLIGATIONS OTHEE THAN STOCKS. Obligations. Capital. Issued. Outstand- ing. Dividends. 1915 Market value. DEBT OF STATE. Deuda Interna Consolidada Deuda Nacional de Amortizaci6n . Peruvian pounds. 3,623,260 4,389,215 CEDULAS AND B'iNDS. Cedillas Hipotecarias: Banco Intemacional del Peru — -8 per cent 7 per sent Banco Italiano, 6i per cent Credito Hipoteeafio del Pent— 8 per cent &h per cent Empf esas El&tricas Asociadas Compania Peruana de Vapores y Dique del Callao Same Tranvia Eleetricode Arequipa Sociedad Agricola San Nicolas Sociedad Industrial "La Estrella" Same, second loan Sociedad Industrial "Infantas" Ingenio de Aziicar Bueu Pastor Ingenio Azucarerode Huaura Inca Cotton Mill Co. (Ltd.) Fabriea Nacional de Tejidos Santa Catalina Emprestito del Colesio de Guadalupe Compania del Teatro Municipal Empr&titos del Ferrocarril Supe-Barranca R. A. ,200,000 350,000 250,000 75,000 80,000 30,000 32,000 85,000 50,000 15,000 53,200 90,000 80,000 5,320 30,000 Peruvian pounds. 2,660,645 574,610 5,100 14,350 80,730 133,980 .49,250 1,091,460 311,720 150,000 67,200 20,900 26,550 32,000 78,200 600 15,000 30,500 61,600 56,450 4,440 29,100 Per cent. 1 Per cent. Peruvian pounds. 12.600 13@17 103 100 97.500 103 92.500 "loi a 1916 dividends in some instances are for part of year only. 6 Fixed annual dividend. SHARES. Names of enterprises. Capital. Total. Reserves. Par. Nominal. Paid in Dividends. 1916 Market value. Peruy Londres Italiano Intemacional del Peru Popular del Peru Credito Hipotecario del Peru. TAX-COLLECTING COMPANTES. Administradora del Gusno Salinera del Peru Administradora de los Alma cenes Fiscales Recaudadora de Impuetos INSURANCE COMPANIES. International del Peru , Rimac Italia La Nacional La Popular Unidas de Seguros Peruvian pounds. 500,000 200,000 100,000 200,000 50,000 30,000 100,000 100,000 ,500,000 200,000 250,000 200,000 250,000 200,000 500,000 Peruvian pounds. 700,000 299,800 125,000 207,700 22,912 15,000 55,380 25,000 1,350,000 93, 101 111,414 928 40,001 52,100 70,000 Peruvian pounds. 10 10 5 2 10 10 10 10 10 10 Peruvian pounds. 10 10 5 0.5.00 0.4.00 0.2.50 1 1 1 0.8.00 1 2.8.00 Per cent. 3 7 4 5 12 10 12 10 Lp. 0. 800 Per cent. 10 f 14 05 12 Lp. 0.025 Lp. 0. 800 40 30 15 7 8 Peruvian pounds. 11 12.500 3.300 2.2O0 0.500 0.550 0.250 8.800 5.700 5.500 2 0.800 1.500 2.300 APPENDIXES. SHAKES— Continued. 525 Names of enterprises. Capital. Total. Reserves Par. Nominal. Paid in Dividends. 1915 1916 Market value. AGRICULTURAL ENTERPRISES. Soeiedad Agrfcola San Nicolas. . Sociedad Industrial "La Es- trella" Sociedad Ganadera de Junin — Sociedad Agrfcola Paramonga. Ingonio Azucarero de Huaura. Ingenio Azucarero Corpacancha . New Chuquitambo Gold Mines (Ltd.) MANUFACTURING ENTERPRISES. Fabricade Fdsforos "El Sol". Peruvian Cotton Mill Co. (Ltd.) (Vitarte) Fabrica de Sombreros "Fenix" Comp. Ind. A. Field y La Es- trella(Ltd.) Soc. Curtbre a Vapor de Mon- serrate - TRANSPORTATION COMPANIES. Empresa del Muelle de Tambo de Mora Compafiia Peruana de Vapores y Dique del Callao PUBLIC-UTILITY ENTERPRISES. Empresa del Agua del Barranco . Empresa del Agua de Miraflores . Empresa del Agua de Paita y Colan Empress de Agua Potable de Piura Empresas Electricas Asociadas. MISCELLANEOUS. Compafiia Urbana Coch areas. . Compafiia del Teatro Municipal Peruvian pounds. 160,000 110,000 110,000 400,000 35,000 30,000 50,000 - 40,000 100,000 9,963 48,500 17,200 25,000 300,000 20,000 8,000 . 6,000 10.000 1,500,003 20,000 7,650 Peruvian pounds. 160,000 44,000 124, 186 400,000 21,000 34,884 50,000 80,183 9,963 33,500 17,200 25,000 300,000 20,000 8,000 6,000 10,000 1,771,898 30,622 8,530 Peruvian pounds. 10 10 100 100 10 100 10 20 0.9.60 1 10 Peruvian pounds. 10 10 100 100 4. 5. 00 100 10 Per cent. 16 Per cent. Peruvian pounds. 9 0.7.20 1 10 20 0.9.60 0. 9. 36 5 0. 4. 00 10 Lp.0.1.60 .850 2.750 0.530 o Fixed annual dividends. URUGUAY. MONTEVIDEO GAS CO. (LTD.). Registered 1872. Has power to generate and otherwise deal in electricity, gas, and any other illuminating agent. The company has no concession. Capitalization. — December 31, 1915: Shares (par £20), £600,000 authorized, £541,920 outstanding; 5 per cent perpetual first-mortgage debenture stock (in- terest January and July), £78,440 authorized; £28,680 outstanding. Income account.— -Year ended December 31, 1915: By sales of gas, residuary products, meter and cooker rents, profits on sales of gas fittings, etc., £143,043 ; expenditures, £115,417; balance, £27,626; balance brought forward from 1914, £13,255; total net income (including other income), £42,925; interest and other charges, including depreciation of investments, etc., £13,405; balance before payment of dividends, £29,519. Gross receipts for 1914, £123,818 ; net receipts, £23,962. The financial condition of the company was excellent on December 31, 1915. Reserve account, £32,000 ; insurance fund, £12,500 ; contingency account, £17,739. Dividends.— 1899 to 1911, 3£ per cent annually ; 1912 and 1913, 4 per cent ; 1914 and 1915, 3 per cent. 526 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. Directors. — Charles Hunt, chairman; Prank H. Jones, John News, W. Edgar Home, Frank H. Jones ; secretary, Henry Kearns, 9 New Broad Street, Lon- don, E. 0. VENEZUELA. BOLIVAR RAILWAY. This company, registered 1896, operates a line of railway from the port of Tucacas on the Caribbean Sea to Barquisimeto, an interior city of some 40,000 inhabitants. The line was originally built from Tucacas to the Quebrada (now Aroa) Copper Mines (about 50 miles). Later this line was amalgamated with the Southwestern Railway of Venezuela, which was practically an extension of the Bolivar Railway (then known as the Quebrada Railway & Copper Co.), operating from a point near the terminus of the latter to Barquisimeto. A branch line (the San Felipe branch) is under construction; it will be about 28.5 miles in length, and will pass through what is believed to be the richest valley in Venezuela. After leaving Barquisimeto, which is a center for the produce of the Northern Andine country, the railway begins a gradual climb until Duaca (a small town) is reached. From this point a valley capable of considerable cultivation is traversed. At El Hacha, where the branch to the Aroa mines joins the main line, the traffic is greatly increased, owing to the large shipments of copper ore that are sent to Tucacas. A portion of the line passes through wild forest country, which, a short distance back from the railway, is virtually an un- explored wilderness. The Bolivar Railway owns an estate of about 250,000 acres granted by the Government of Venezuela. The estate is to be developed fully in the near future. In 1912-13 £10,234 was expended toward the development of the estate. The steamer Barquisimeto and about 10 targes, lighters, etc., are owned by this company. CAPITALIZATION, JUNE 30, 1915. Securities. Authorized. Issued. £700,000 300,000 400,000 £683,200 292,800 250,000 Preference shares, 5 per cent noncumulative (par £1) 6 per cent debenture stock (interest March and September) Note. — Securities are listed on the London Stock Exchange. Dividends. — Preference: 1904-5 and 1905-6, 3 per cent; 1906-7, 2 per cent; 1907-8, none; 1908-9, 3 per cent; 1909-10, 3J per cent; 1910-11, 1911-12, and 1912-13, 5 per cent ; 1913-14, 5 per cent ; and 1914-15, 3 per cent. In 1912-13 the ordinary stock received 2 per cent. The 1913-14 and 1914-15 preference dividends were paid in 6 per cent script convertible into 6 per cent debenture stock at par when conditions are such that debenture stock may be issued. Income account.— -Tear ended June 30, 1915: Gross earnings, £87,497 (in- cluding £5,916 steamship earnings) ; operating expenses (including £5,831, cost of running steamers, and £3,254, London office expenses), £48,828; net revenue, £38,669; total net, £38,682; interest, income tax, etc., £19,821; estate development, £3,023 ; reserves, £7,000 ; surplus, £8,837 ; balance brought forward from June 30, 1914, £52,374; balance (surplus), £61,211. For the year ended June 30, 1916, gross receipts totaled £109,372. In 1914-15 34,827,349 kilos of freight were handled, as compared with 48,582,318 kilos handled in 1913-14 (1,000 kilos=l metric ton of 2,205 pounds). Mileage operated. — June 30, 1915: 110 (not including 12 miles of San Felipe branch completed September, 1915). Rolling stock. — Locomotives, 17; passenger train cars, 17; freight and service cars, 312 ; motor cars, 3 ; steamers, 2 ; other floating equipment, 5 Directors.— John Soame Austin, chairman; Nathaniel G ' Burch deDUtv chairman ; Claude E. S. Bishop, Percy C. Quilter, James A. Goudge, John M. Macdonald; secretary, J. T. Dillon, 9 New Broad Street, London E C General manager stationed at Pueblo Nuevo, Venezuela. ' APPENDIXES. 527 EL AMPERO MINE (LTD.). Incorporated 1908 to take over the La Paz Mine, situated 12 miles east of Guacipati, capital of the Vuruari district, Venezuela (near the El Callao Mine). The area is 400 acres, heavily timbered, and the mine workings con- sisted in 1913 of a collection of about 25 shafts of depths varying from 30 to 90 feet. Good mining timber and firewood exist in the vicinity. A 10-stamp mill has been erected with a milling capacity up to 100 tons per day. The river and dredging concessions were acquired in 1914. Capitalization. — Authorized, £104,000 ordinary shares (par £1) ; issued, £90,170 (£89,325 paid in), including £83,993 (fully paid) issued to vendors. INCOME ACCOUNTS. Items. Year ended June 30— 1914 1915 £18,789 14,645 o £17, 633 6 16, 197 4,094 1,436 5,016 2,808 a Proceeds of gold, £17.228. i Expenses at mine, £11,059. Depreciation, £2,713 (12J per cent). Cash balance. — June 30, 1915 : £6,894 ; gold on hand, £860 ; bills, etc., receiv- able, £620 ; sundry creditors, £533. Directors. — H. E. M. Bourke, chairman ; Gerald M. Browne, Cowley Lambert, J. A. Cipriani, Arthur Pomeroy ; secretary, H. B. Cleford, 21 Great Winchester Street, London, E. C. Manager: Henry Cribb, Guacipati, Venezuela. Com- mercial agent : Jos6 Acquatella, Ciudad Bolivar, Venezuela. LA GUAIRA HARBOUR CORPORATION (LTD.). Registered 1886; reorganized 1896. The company has a concession in per- petuity, with exclusive rights until 1985 to own and operate a pier aflfl gen- eral harbor undertaking at La Guaira, Venezuela. Extensive properties are owned and revenues are derived from lighterage, docking, handling of merchan- dise, and passengers, etc. The company also controls, through ownership of stock and income bonds, the Macuto & Coast Line Railway of Venezuela (Ltd.), operating a line of railway between La Guaira, Maiquetia, and Macuto, the last-named town being the principal seaside resort of the Republic. The line was formerly operated by steam but has recently been converted to electricity. Its securities are carried on the books of the La Guaira Harbour Corporation at £20,540. Capitalization. — Ordinary shares (par £20), £400,000; 5 per cent first mort- gage irredeemable debenture stock, £420,000; 5 per cent noncumulative second mortgage stock, £578,279; total, £1,398,279. No dividends are being paid on the ordinary shares, and interest on the second mortgage stock has been paid in recent years as follows: 1912, 2 per cent ; 1913 and 1914, 2J per cent each ; 1915, 2i per cent. INCOME ACCOUNTS. Items. 1912 1913 1914 1915 Gross receipts. Bxpc Seti Net revenues Surplus after first mortgage debenture interest . Tonnage handled at port £66,258 35,107 31, 151 £74,411 38,043 36,368 15,943 £70,901 34,954 35,948 16,087 106,927 13,924 117,635 17,671 112, 086 13,273 £65,347 30, 598 34,749 14,660 105,775 8,216 528 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Gross receipts In 1916 totaled f70,571 and in 1917 £74,085. The surplus for 1917, after first-mortgage debenture interest, totaled £13,817. Directors.— Capt. W. B. McTaggart, chairman ; Teofilo Rojas (representative of the British Government) ; T. H. Evans; Lieut. Col. F. M. Carleton, D. S. O. ; J. G. B. Stone ; Col. Claude Lowther, M. P. ; secretary, B. J. Summers, 6 Broad Street Place, London, E. C. General manager: W. H. Andrews, La Guaira, Venezuela. MACUTO & COAST LINE RAILWAY. This railway, operated by electricity (until recently operated by steam) ex- tends from La Guaira (where connections are afforded with the La Guaira & Caracas Railway) to Marquetia and Macuto. This is a passenger line handling the traffic to and from Macuto, the principal seaside resort of Venezuela (about 6 miles operated). The shares and debentures of this company are owned by the La Guaira Harbour Corporation (which see) and are carried on the latter's books at cost, £20,540. Net revenues for 1914-15 (year ended September 30) were £2,163, as com- pared with £3,072 in 1913-14 and £591 in 1912-13. No dividend was paid on ordinary stock in 1914-15; 3 per cent was paid in 1913-14. Directors. — See La Guaira Harbor Corporation (Ltd.). NATIONAL MATCH FACTORY OF VENEZUELA (LTD.). Registered 1905 as the Venezuela Match Monopoly (Ltd.) ; reregistered under present title during 1909. The company has acquired, at a cost of £206,765, the shares (5,499,000 bolivares of a total of 5,500,000 bolivares outstanding) of La Corapanla Anonima Pabrica Nacional de F6sforos, which has a monopoly of the manufacture and sale of matches of all kinds within the Republic of Venezuela until 1929. The shares acquired have subsequently been canceled, and the business is now carried on directly by the National Match Factory of Venezuela proper. Capitalization. — Shares authorized, £220,000 (par £1) ; outstanding, £219,967. Cash on hand August 31, 1915 (latest figures obtainable), £10,196; loans, etc., receivable, £21,156; reserve account, £10,500; creditors, £5,321. INCOME ACCOUNTS. Items. Year ended August 31- 1911 1912 1913 1914 1915 Gross receipts Balance forward from previous year Profits applicable" to dividends and reserves Transferred to reserves Dividend paid percent. £46, 282 677 13,318 3,000 £50,094 418 17,866 3,000 £51,836 1,666 18,752 3,000 £57,546 1,282 18,068 1,500 *i £56, 162 1,168 15,912 None. Directors. — O. H. Fuerth, H. Maubourguet, A. Pam, T. M. C. Steuart; secre- tary, A. R. Bennett, 65 Bishopsgate, London, E. C. Other offices: Paris and Caracas (Venezuela). NEW CALLAO GOLD MINING CO. (LTD.). Registered, 1912, in France. Acquired properties from a previously operated company located at El Callao, in the Turuari Valley, Venezuela. Capitalization. — Shares, £300,000 authorized, £265,000 outstanding- deben- tures, &i per cent, £60,000 outstanding. Income accounts. — Not yet published. Directors.— Col. E. Aries, D. Carpentier, A. Delarbe, A. Fraisse V Fran- chische, G. Gratieux, A. Picard, G. Prudhomme (all of Paris, France) London office : 4 Cullum Street, London, E. C. PUERTO CABELLO & VALENCIA RAILWAY CO. (LTD.). Registered 1885. Line extends from Puerto Cabello to Valencia Venezuela (34 miles). Opened for traffic 1888. There is no option for Government purt APPENDIXES. 529 chase. Report for 1915 claims £350,761 from Government as guaranties for years 1905 to 1915 ; these claims are to be settled by arbitration. INCOME ACCOUNTS. Items. 1913 1914 1915 £43,750 25,121 £40,040 26,654 £42, 677 27,544 18,629 13,386 15,133 Miscellaneous income, 1915, £702 ; total net income, £15,835 ; amount carried forward from 1914, £383; interest paid, 5 per cent on first-charge debentures and 4J per cent on second-charge debentures, £7,650 ; balance, £69 ; debit balance to revenue account, £11,926. Capitalization. — £460,000 ordinary shares, par £10 ; £170,000 first-charge 5 per cent coupon bonds due 1955 (£20,000 additional in treasury), par £50 and £100; £170,000 5 per cent second-charge debenture stock; total, £820,000. The first-charge bonds are redeemable at par at company's option. The second- charge debenture stock receives interest when earned, this interest being cumu- lative. Interest has been paid as follows : 1 per cent in 1905 ; 8s. 4d. in 1910 ; 16s. in 1911; 4| per cent in 1912; 5 per cent in 1913; 3J per cent in 1914; 4i per cent in 1915. Coffee, meat, and coal were the principal commodities handled in 1915. Equipment. — December 31, 1915 : Locomotives, 11 ; passenger-train cars, 13 ; freight cars, 96 ; other cars, 2. Directors. — Nathaniel G. Burch, chairman; Samuel Watkinson, John Mathe- son Macdonald; G. A. P. Pilditch, managing director and secretary, Finsbury Pavement House, London, E. C. General manager: W. A. Littell, Valencia, Venezuela. UNITED ELECTRIC TRAMWAYS CO. OF CARACAS (LTD.). Registered 1906. A holding company of the shares (1,272, of a value of £168,245) and of a mortgage (6 per cent per annum, value £170,000) of the Compania de Tranvias Electricos de Caracas. The latter company operates about 16$ miles of electric tramway lines in the city of Caracas, Venezuela. Capitalization.— Shares, £200,000 authorized and £170,000 outstanding, par £1 ; 5 per cent first-mortgage debenture stock due 1950, £200,000 authorized and £170,000 issued, of which £163,250 remained outstanding June 30, 1915. There is a sinking fund of i per cent per annum purchasing this debenture stock in the market or calling same at not more than 105. The results of operating the line were as follows: Gross receipts — 1914-15, 1 426 679 bolivares ; 1913-14, 1,550,587 bolivares. Net receipts— 1914-15, 693,665 bolivares (£27,471) ; 1913-14, 801,967 bolivares (£31,761). Of the profits for 1914-15, 50,000 bolivares were transferred to reserve and the balance paid to the holding company as interest and dividend. Including other income, the holding company received £25,338, of which £10,896 was paid as interest, sinking fund, and other expenses. The surplus was £14,543. Pas- sengers carried during 1914-15 numbered 4,992,210 (1913-14, 5,391,809). Cars in service, 48. Dividends.— 1912-13, 5 per cent ; 1913-14, 11 per cent ; 1914-15, 7 per cent and 1* per cent extra. Directors.— Maj. Gen. Ivor Philipps, D. S. O., M. P., chairman ; Sir Douglas Fox, Percy Cross, London ; Edgar Allan Wallis, Caracas, Venezuela ; secretary, A. J. Shepherd, 9 New Broad Street, London, E. C. VENEZUELA ELECTRIC LIGHT CO. (LTD.). This company owns electric lighting and gas plants in Caracas, Venezuela. The company holds an exclusive contract to light the city of Caracas until 1937. Two hydroelectric stations are owned. The property is operated by the J. G. White Co. (Ltd.) as managers, and is controlled by the International Light & Power Co. (which see). 63018°— 18 34 530 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Capitalization. — $900,000 stock and $900,000 first-mortgage debenture stock (all securities owned by the International Light & Power Co. (Ltd.), of Can- ada). Income account. — Year ended June 30, 1915: Net earnings, £22,210 (£ 22,759 in 1913-14) ; deductions for renewals and general reserves, £4,058 ; surplus car- ried to balance sheet of International Light & Power Co., £18,152 (£18,514 in 1913-14). Directors. — See International Light & Power Co. VENEZUELA TELEPHONE & ELECTRICAL APPLIANCES CO. (LTD.). Registered 1890 as successor to the Inter-Continental Telephone Co., of New Jersey, TJ. S. A. The company's concession gave exclusive privileges until 1914. These privileges have not been renewed. The ownership of the property is perpetual, however. CAPITALIZATION, JUNE 30, 1915. Securities. Author- ized. Out- standing. Ordinary shares (par£l) Cumulative 8 per cent preference shares * 6 per cent prior lien debentures (matured July 1, 1915; payment of principal deferred). 5 per cent first mortgage debentures (due Oct. 1, 1925) 7 per cent second mortgage debentures (due 1940) £70,000 15,000 30,000. 70, 000 20,000 £70,000 8,600 30,000 70,000 20, 000 o Includes £7.100 deposited as security against loan. Secured loans amounted to £22,33S Telephone receipts. — Years ended June 30 : 1900, £23,892 ; 1905, £22,768 • 1910 £24,393 ; 1911, £25,854 ; 1912, £27,967 ; 1913, £31,648 ; 1914, £34,824 ; 1915, £37.612! Income account. — Year ended June 30, 1915 : Receipts, including other income, £39,736; net income, £17,644; operating and London office expenses, £22,092; Interest and income tax, £7,676 ; surplus, £9,968. A total of £10,434 was carried forward from 1913-14, making surplus £20,401. Out of this surplus £2,580 (less income tax) was paid as a dividend of 30 per cent on the cumulative preference shares, liquidating dividends in arrears to December 31, 1906. In addition, £6,000 was credited to reserve for renewals and depreciation. Directors.— Sir Douglas Fox, chairman ; J. S. Austin, C. B. S. Bishop, H. S. Simmonds ; secretary, R. J. Beevor, 9 New Broad Street, London, B. C. Appendix B.— CENTRAL AMERICA AND THE WEST INDIES. COSTA RICA. COSTA RICA COFFEE ESTATES (LTD.). Registered 1897. Owns large coffee estates in the Republic of Costa Rica. About 365 acres are under cultivation. Capitalization.— June 30, 1914 (latest available): Stock (par £10), £50.000 authorized, £30,560 outstanding ; debentures, £10,000 authorized, £5,000 outstand- ing (an additional £4,000 deposited as security for loans) ; loans, £10,750 out- standing. Income account. — Year 1913-14 (latest reported) : Receipts, £3,946; expenses, depreciation, etc., £6,348 ; loss, £2,402 ; debit balance to carry forward, £10,186. Dividend. — A 3 per cent dividend was paid in 1903-4; none since. Directors. — A. J. Shepherd, chairman ; Kenneth Reid, Dr. A. F. Pirie ; secre- tary, R. J. Beevor. Office : 9 New Broad Street, London, E. O. COSTA RICA ELECTRIC LIGHT & TRACTION CO. (LTD.). Registered 1898. Operates electric lighting and electric tramway properties located in the city of San Jose and in the central valley of Costa Rica. The tramway line is 10 miles in length. The municipality of San Jose will take over the tramway lines, without cost, in 1956, the lighting undertaking re- maining the property of the company in perpetuity. Capitalization. — June 30, 1915 : Authorized and issued, £130,000 ordinary shares (par £1) ; prior lien 6 per cent debentures, £98,900 (£1,100 additional re- deemed out of sinking fund), sinking fund suspended until one year after close of European war, issue to be retired on or before July 1, 1954; 5 per cent first debentures, £230,000 authorized, £197,150 issued, £187,750 outstanding (balance retired through sinking fund, which was suspended 1912 to 1916), principal re- payable on or before January 1, 1948. Income ■account. — Net earnings, 1914-15, £21,663 ; interest, discount, London expenses, etc., £17,839; balance, £3,824; net earnings, 1913-14, £26,352; profits, £8,057 ; profits, 1912-13, £7,338 ; 1911-12, £5,732. The earnings in 1914-15 were affected by adverse exchange conditions. Directors.— W. F. Leese, Frederick Davies, F. M. Crisp, C. A. Vansittart, F. Witting ; secretary, I. Zillhardt, 9 New Broad Street, London, E. C. Costa Rica office : San Jose. HONDURAS. ANTIGUA GOLD & COPPER CO. Hibernia Bank Building, New Orleans, La. Mine located at Minas de Oro, Comayagua, Honduras. Owns approximately 531 acres of land carrying gold, silver, and copper. Capitalization.— $2,000,000 ; par $5. Officers. — O. M. Dunn, president ; James L. Wright, vice president ; L. S. Scott, secretary and treasurer. NICARAGUA. BABILONIA GOLD MINES (LTD.). Registered December, 1911. Owns three mining claims — the Crimea, the Babilonia, and the Santa Maria — located at La Libertad, Chontales District, Nicaragua. Tons milled, 7,675. Ore reserves, December 31, 1914, estimated at £59,980. Capitalisation. — £200,000 shares authorized, £170,007 outstanding; par £1. 531 532 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. Operating results. — Tear 1914 (after depreciation), loss £17,274; year 1913, profit £3,705 ; debit balance carried forward, £13,400. Directors. — T. J. Hoover, chairman ; J. A. Agnew, J. H. Cordner-Jones, A. P. Kuehn, A. Pomeroy; secretary, G. G. Hay, 1 London Wall Buildings, London, E. C. CENTRAL AMERICA GOLD FIELDS SYNDICATE. Registered 1914. Acquired options on five groups of gold mines in Pis Pis district of Nicaragua. Not worked at present. Capitalization. — £5,000 stock, par £1, and £10,000 7 per cent notes (income). Secretary : G. G. Hay, 1 London Wall Buildings, London, B. C. CENTRAL AMERICAN MINES (LTD.). Registered 1913 as a reconstruction of the Oroya Leonesa (Ltd.). Owns gold-mining properties near Matagalpa, Nicaragua. A 20-stamp mill and vari- ous plants have been erected. Capitalization. — £150,000 shares, par 5s. ; 6 per cent debenture bonds, £35,000, redeemable at par November 30, 1917, convertible into shares at par until redemption. Yield for 13 months ended December 31, 1914, £38,279 (31,556 tons). Ore reserves, 83,606 tons. Directors. — T. J. Hoover, chairman ; J. A. Agnew, J. H. Cordner-Jones, A. F. Kuehn, A. Pomeroy, W. F. Turner ; secretary, G. G. Hay, 1 London Wall Build- ings, London, E. C. Manager at mine : C. E. Bunker. SALVADOR. BUTTERS SALVADOR MINES (LTD.). Registered 1912 in Canada to take over assets of a British company of same name. Assets transferred in 1914. Properties consist of an area of 547 acres of gold-bearing lands, situated not far from Santa Rosa, Salvador. Capitalization. — $750,000 United States gold ; par $5. fully paid. Dividends. — 1903-4, 55 per cent; 1904-5, 40 per cent; 1905-6, 55 per cent; 1906-7, 75 per cent; 1907-8, 80 per cent; 1908-9, 68J per cent; 1909-10, 45 per cent ; 1910-11, 41i per cent ; 1911-12 and 1912-13, 35 per cent each ; 1914, Hi per cent; 1915, January $0.25 regular and $0.12 extra, April, July, and October $0.25 each, total for year $1.12 or 22f per cent ; 1916, 22f per cent. Income account. — Year ended June 30, 1914 (report submitted December 1915): Gross, $504,580; net, $116,041; dividends, $92,062; carried, forward $110,264. Office : 232 St. James Street, Montreal, Canada, and 120 Broadway, New York. See page 447. MONTE MAYOR GOLD & SILVER MINING CO. Registered 1911. Acquired the Monte Mayor Mines, covering an area of about 4 square miles, located near Santa Rosa, Salvador. Capitalization. — Preference shares, £30,000 authorized, £20,297 outstanding. The preference shares are entitled to 15 per cent per annum until May, 1918^ when they become ordinary shares. A dividend of 4 per cent was paid on the preference shares in 1912 ; none since. No income account or balance sheet is published at present. Directors. — J. P. Clarkson and E. L. Pullinger, London ; F. Macay and E. H. Pullinger, Salvador ; secretary, St. J. Bennett. Office : 16-17 Devonshire Square, Bishopsgate, London, E. C. BRITISH WEST INDIES. ANGOSTURA BITTERS— J. G. B. SIEGERT & SONS (LTD.). This company handles the manufacture and sale of Angostura bitters and other cordials. With the exception of products of the sugar industry this is practi -ally the only manufactured export of Trinidad. The total exports of bitters from the colony in 1915 amounted to 27,742 gallons. APPENDIXES. 533 Capitalization. — Authorized and outstanding, £85,000 6 per cent cumulative preference shares and £85,000 ordinary shares, par ^£1. Dividends for the past several years have averaged 6 to 6i per cent pel- annum. Reserve funds, 1913-14, £9,293 ; carried forward, £1,332. Directors. — A. Henderson, chairman; R. F. Henderson, Capt. A. Lund, R. H. McCarthy, A. O. Siegert, A. G. Siegert; secretary, H. B. Perks. London ad- dress : Spencer House, South Place, E. O. BARBADOS ELECTRIC SUPPLY CORPORATION (LTD.). Registered 1909. The corporation, which was granted the right to construct an electric supply plant and station at Bridgetown, Barbados, has an exclu- sive franchise until 1949. This franchise covers all territory within 5 miles of the city. The company is supplying a large portion of the public lighting of Bridgetown, and has also obtained a contract from the government for lighting the wharves and Inner Basin. As of June 30, 1915 (latest report obtainable;, there were 997 consumers, as compared with 737 in 1914, 456 in 1913, and 247 in 1912. A total of 15,036 lamps and motors were connected, as compared with 5,201 as of June 30, 1912. Capitalization. — June 30, 1915 : Preference shares, 7 per cent and partici- pating, £40,000 (par £1) ; ordinary shares, £20,000 (par £1) ; loan secured by an issue of 7 per cent debentures, £10,000. INCOME ACCOUNTS. Items Year ended June 30 — 1913 1914 1915 £457 1,684 £1,381 1,823 £2,231 1 728 -1,227 -442 +503 Directors. — A. W. Tait, chairman ; G. H. J. Hooghwinkel, William C. Kenny, W. P. Leese, London, England. Advisory committee in Barbados : Hon. Sir William Chandler, Hon. J. P. Wright, Bridgetown. London office: Basildon House, Moorgate Street, E. C. ; Bernard Heyburn, secretary. DOMINICA FORESTS & SAWMILLS (LTD.). Registered 1911. Acquired 12,500 acres of timberlands in the island of Dominica and option over additional lands, warehouses, etc. The company has planted coconut and lime trees and has partly suspended timber operations. Capitalization. — £80,000 shares authorized (par 5s.), outstanding, £59,280; £5,000 5 per cent first debentures (par £1) have been authorized and offered for subscription at 72 per cent. Income account. — Year ended March 31, 1915 (submitted March, 1916) : Loss on working and expenditures in London, £1,112 ; debit balance to profit and loss, £7,888. Directors. — H. E. Carter, chairman ; C. P. Bennett, C. Temperley, A. B. Raper. Office : 53 Palmerston House, Old Broad Street, London, E. C. GENERAL OIL FIELDS (LTD.). Registered 1912. Acquired 1 square mile of oil properties located in the Palo Seco district, Trinidad (recently an oil property in Newfoundland was acquired). Capitalization. — Authorized, £70,000, including £30,000 ordinary (par 5s.) and £40,000 deferred (par Is.). The ordinary shares will receive all dividends up to 10 per cent and one-half the balance. Thus far, 21,507 ordinary and 500,000 deferred shares have been issued. Income account. — None has been published as yet. Capital expenditures De- cember 31, 1915, £25,411 ; general expenditures, £2,160 ; investments, £2,080 ; ad- vances, etc., £720; cash, £258; calls in arrears, £180; creditors and temporary advances, £2,150. Directors.— H. A. Clifton, A. A. G. Kendall, H. F. G. Weber ; secretary, P. C. Bird, Finsbury Court, London, E. C. 534 INVESTMENTS IN LATIN AMERICA AND BRITISH. WEST INDIES. MONTSEKRAT CO. (LTD.). This company, incorporated 1875, owns large lime plantations on the island of Montserrat and on other islands of the Leeward and Windward groups. It carries on an extensive business in bottled lime juice. Its properties in Great Britain are located at Birmingham. Capitalization— Shares authorized, £29,180 ; outstanding, £13,880 (f 9,369 paid in) ; debentures, £1,000. Income account. — Year ended June 30, 1916 : After the payment of a dividend of 7J per cent, there remained to be carried forward £810. Reserve funds, £10,607. Dividends.— 1906-7, 30 per cent; 1907-8, 35 per cent; 1908-9, 10 per cent; 1909-10 and 1910-11, 20 per cent each ; 1911-12, 12J per cent ; 1912-13, 15 per cent ; 1913-14, 10 per cent ; 1914-15, 7i per cent. Directors.— W. A. Albright, chairman ; R. Clark, W. King, A. T. Little, F. A. Sturge, J. Sturge (managing director). Offices: 2 Gas Street, Birmingham, England ; Plymouth, Montserrat, British West Indies. NEW TRINIDAD OIL CO. Registered 1915. Acquired the property of the Trinidad Silverstream Oil- fields (Ltd.), consisting of about 1,100 acres of oil lands, the properties being known as Malgretout, Mon Desir, and Silverstream. Capitalization. — £75,000 authorized (par 5s.). Accounts not yet published. Directors. — F. King, J. K. Kelty, J. Sinclair; secretary, D. M. Purkins, 26 Victoria Street, Westminster, S. W., London. OIL EXPLORATION CO. OF TRINIDAD (LTD.). Registered 1915. Acquired from the International Oil Lands (Ltd.) large oil-bearing areas in Trinidad (approximately 1,040 acres). Capitalization. — £80,000 shares authorized (par £1), £45,010 outstanding. Income accounts not yet published. Directors. — H. A. C. Bonar, J. Conchie, E. Nash ; secretary, E. Ronaldson, 62 London Wall, London, E. C. PETROLEUM OPTIONS (LTD.). This company, registered in 1908, holds approximately 47,000 ordinary shares of the Trinidad United Oilfields (Ltd.) (total ordinary shares outstanding, £180,000, par fl). The investments held by the Petroleum Options (Ltd.) were valued on its books as of December 31, 1914, at £15,085, while the property of the company in Trinidad was valued at £7,487. Capitalization. — Ordinary shares, authorized £30,000, outstanding £14,857; preference shares, 10 per cent noncumulative (par 5s.), £15,000. There are also outstanding first-mortgage debentures, with interest, £1,486. In 1915 ad- ditional shares were issued. ■ Profit and loss account from December 1, 1911, to December 31, 1914, showed a balance of profit (subject to realization of shares at their estimated values) amounting to £835. Directors. — A. A. G. Kendall, chairman ; H. Weber, A. Vernon Davis, H. A. Clifton ; secretary, P. C. Bird. Office : Finsbury Court, London, E. C. SOUTH NAPARIMA (TRINIDAD) OIL CO. (LTD.). Registered 1910. Acquired about 1,044 acres of oil-bearing lands located at Barrackpore Settlement, South Naparima Ward, Trinidad. Later sold 297 acres, including two producing wells, to the Venezuelan Oilfields Exploration Co. (Ltd.), for £15,000 cash and £30,000 in preference shares and an annual royalty of 5 per cent on oil produced. The rest of the property is to be disposed of to the Trinidad Oil & Transportation Co. (Ltd.) for £66,000 in shares. Capitalization. — £50,000 shares authorized, £47,100 outstanding. Directors. — J. S. Smith-Winby, chairman ; L. E. Agostin, R. H. McCarthy, Hugh McLelland, Frank Martin ; secretary, A. O. Chudleigh, 48 Cannon Street! London, E. C. APPENDIXES. 535 TRINIDAD CENTRAL OIL FIKLDS (LTD.). Registered 1911. Acquired property licenses over 26,000 acres of oil lands at Tabaquite, Trinidad. Twenty-three wells have been sunk, and in 18 oil has been found. The company has erected storage tanks and is in a position to handle large shipments. Capitalization. — Authorized £110,000 shares, outstanding £94,200 shares (par £1), of which £50,000 are fully paid and the remainder 87 i per cent paid in. Income account. — Year ended April 30, 1915, showed a net profit of £1,910, as compared with £379 in 1913-14. Cash on hand, £7,045 ; stores, £3,895 ; debtors, £516 ; stock of oil, £3,367 ; creditors and bills payable, £2,470. Directors. — A. Duckham, chairman ; P. M. Stewart, H. C. B. Underdown : sec- retary, R. A. Lpngcroft, 79 Bishopsgate, London, B. O. TRINIDAD LEASEHOLDS (LTD.). This company was registered in 1913. It acquired a lease of oil lands in the island of Trinidad, area about 81 square miles, and a further exploration license over 20,000 additional acres. About 65,000 acres are held at present. A num- ber of wells are producing, mostly on the properties acquired from the Trinidad Forest Reserve Oil Co. (Ltd.). A 26-mile pipe line, tanks, and a refining plant are owned. Production commenced May, 1914. For the first 13 months the production totaled 103,000 barrels. Capitalization. — Shares authorized, £500,000; outstanding, £417,500. Loans, 6 per cent, due June 30, 1917, £135,000. Income account not yet published. Directors. — T. J. Milner, chairman ; R. H. McCarthy, J. L. Siddall, A. W. Rogers, Maj. H. L. Sante. Office: 1 London Wall Buildings, London, E. C. Manager in Trinidad : H. S. Fuller. Trinidad office : 76 Marine Square, Port of Spain. TRINIDAD OIL & TRANSPORT CO. (INC.). Registered December, 1913, and reregistered April, 1914. Acquired the Trinidad properties of the Venezuela Oilfields (Ltd.) (previously acquired by this company from the South Naparima Co), total 346 acres, and at the same time arranged to take over the properties operated by the South Naparima Oil Co. (743 acres). Seven wells have been sunk on the lands acquired from the Venezuelan company, their depth varying from 291 to 1,803 feet. From five of these wells 67,861 barrels of oil were produced during 1915. In addition, 8,716 barrels were produced on other properties. The production was, however, ' limited to the available storage facilities. Property (49J acres) located at Pointe-a-Pierre, on the Gulf of Paria, has been leased for 37 years. A pipe line will be constructed to this port. Capitalization. — Shares authorized, £300,000 ; outstanding, £49,174 ; reserved to be issued to the South Naparima Oil Co. (Ltd.), £66,000; bills payable, £34,318 ; creditors, £5,930 ; value of property acquired or under option, £137,053 ; material, stores, etc., £5,243; cash, £1,126; sundry debtors, £1,637; oil, etc., £4,623. Income account.— 1915 : Gross receipts, £11,958 (1914, £2,669) ; operating ex- penses and depreciation, £7,690 ; profits, £4,269 ; rents, salaries, amounts writ- ten off, etc., £4,872. Directors. — W. W. Rutherford, M. P., R. F. Strachan ; secretary, A. O. Chud- leigh, 48 Cannon Street, London, E. C. Editob's Note. — A word of explanation seems desirable with regard to such enterprises as are mentioned both in the main text of Special Agent Halsey's report and in the foregoing appendixes. The statements in the appendixes are mostly based on conditions at a time not later than December 31, 1915. While this book was in press figures became available, in certain instances, for 1916, 1917, or even for the fiscal year ended June 30, 1918. These recent figures have been inserted in the main body of the report, with the intention of bringing all statistics as nearly up to date as possible. However, it has been deemed inad- visable and impracticable to duplicate such new figures in the appendixes. In the case of the relatively few companies to which these remarks apply, the earlier figures given in the appendixes, are regarded as supplementing those in the report proper and facilitating a more ample, comprehensive survey of de- velopments. Appendix C— INTERNATIONAL ENTERPRISES AND GENERAL DATA. MERCANTILE, PUBLIC UTILITY, AND SHIPPING COMPANIES. FALKLAND ISLAND CO. Chartered 1851. Purchased a large portion of the Falkland Islands. Raises and markets sheep in large quantities and does a general business. Capitalization. — Preference shares (5 per cent cumulative), £ 33,000; ordinary shares, £110,000 (par in both classes, £10). Dividends. — On ordinary shares : 1903, 15 per cent ; 1904, 20 per cent ; 1905, 25 per cent ; 1906, 35 per cent ; 1907, 30 per cent ; 1908, 25 per cent ; 1909, 30 per cent ; 1910 to 1913, inclusive, 35 per cent ; 1914, 40 per cent. No income account is made public. Reserve funds, £53,500. Carried for- ward, £9,677. Directors. — F. E. Cobb, chairman ; R. H. Cobb, R. Blake, W. M. Dean, M. E. Hughes-Hughes, A. W. Lafone ; secretary, E. B. Goddard, 61 Gracechurch Street, London, E. C. Office also at Port Stanley, Falkland Islands. INTERNATIONAL LIGHT & POWER CO. (LTD.). This company was chartered in 1913 under the laws of the Dominion of Canada and owns all the stock and debentures of (1) the Venezuela Electric Light Co., (2) the Compafiia Luz y Fuerza de Parana (of Argentina), (3) the Com- paSIa de Electricidad de Merida. The operations of (1) ahd (2) are described under their respective heads. The companies are operated under the manage- ment of J. G. White & Co. (Ltd.). Capitalization. — June 30, 1915 : 6 per cent cumulative preference shares, $10,000,000 authorized, $1,000,000 outstanding; ordinary shares, $10,000,000 authorized, $3,000,000 outstanding ; 5 per cent sterling first-mortgage debentures, £400,000 authorized, £300,000 outstanding (an additional £100,000 due the vend- ors as per purchasing agreement). The preference shares were largely dis- posed of in 1913 at £18 per share with bonus of $60 in ordinary shares. INCOME ACCOUNTS. Items Year ended June 30— 1915 Interest, dividends, etc., received: Venezuela Electric Light Co Compafiia de Electricidad de Merida Compania Luz y Fuerza de Parana.. Total, including transfer fees, etc. . Interest and other charges paid Balance (surplus) £23,084 8,802 9,565 £18,153 2,599 7,797 41.573 1 7, 859 28,554 18,281 23,714 10,273 Regular dividends at the rate of 6 per cent per annum have been paid on the preference shares. Directors. — Follett Holt, president; George M. Booth, William C. Burton, A. N. Connett, Francis M. Voules ; secretary, E. A. Borel. Office : 9 Cloak Lane, Cannon Street, London, E. C. KOSMOS (GERMAN) STEAMSHIP CO. This company, under normal conditions, operated a line of steamers between Germany, Belgium, and the various ports of South America (particularly the west coast), Central America (west coast), Mexico, etc. Steamers stopped at most local ports. The service has been abandoned owing to the war. 636 APPENDIXES. 537 Capitalization— $3,332,000 shares (year 1913). Reserves, $2,633,265; bills receivable, $1,345,674 ; cash and other assets, $4,449,337. Gross earnings. — $1,514,069 (year 1913). Dividends. — 1912, 14 per cent ; 1913, 16 per cent. ORIENTAL MAIL STEAMSHIP CO. (TOYO KISEN KAISHA). This company, incorporated in Japan 1896, operates a fortnightly steamship service between Yokohama, Japan, and the west coast of South America. Salina Cruz, Callao, Iquique, Valparaiso, and Coronel are called at. In addi- tion, the company operates a monthly service. between Japan and San Francisco (three steamers, 13,000 to 14,000 tons). The steamers in the South American service vary in gross tonnage from 5,000 to 9,300, and in speed from 12 to 17 knots. Thirteen steamers were in service in January, 1914, with a gross ton- nage of 88,000. Capitalization— December 31, 1913: $4,855,000 United States gold ($6,474,000 authorized). Reserves, $447,556. INCOM ACCOUNTS. Items. 1913 Gross re-eipts . . '. Subsidies Total receipts Operating ex crises Net earnings Balance carried over Amount available for dividends Dividends $2,516,806 1,674,765 (2,844,186 1, 643, 763 4,191,571 3,741,191 4,487,949 4,091,421 450, 380 3,540 396,528 1,234 453, 920 a 414,336 397, 762 i 373,874 <■ 10 per cent on $4,143,360 stock. Office : Yokohama, Japan. 6 7.7 per cent. PACIFIC STEAM NAVIGATION CO. (LTD.). This company was incorporated in Great Britain in 1840, being founded by William Wheelwright, of Newburyport, Mass. Wheelwright first made attempts to interest American financiers in his scheme, but was finally compelled to go to Great Britain for financial aid. The company, in later years, has been con- trolled by the Royal Mail Steam Packet Co. and operates between Liverpool, Panama, Callao, and Valparaiso, as well as local ports on the west coast of South America. Capitalization. — £1,500,000 shares, all held by the Royal Mail Steam Packet Co. The subvention received from Great Britain is £32,000, including £2,500 from the Falkland Islands. Formerly the company received an annual sum from the Chilean Government, but this has been discontinued and valuable privileges at the Government dock at Valparaiso substituted therefor. The book value of the fleet (35 ships) is $10,423,566 (United States gold), and the total tonnage is 197,787. Dividends— In 1914, 6 per cent ($437,985). Directors. — T. Rome, chairman ; J. C. Nicholson, J. Cameron Head, W. C. Kenny, A. C. Lubbock, Sir O. C. Phillips, Sir J. Savory, Bart., A. S. Williams. General manager : R. R. Lamb, Valparaiso, Chile. Secretary : T. H. Darlington. Office: 31 James Street, Liverpool, England. ROYAL BELGIAN ARGENTINE STEAMSHIP CO. This company, incorporated 1906, owned four steamers (1,800 to 3,000 net tons) and was building others at the outbreak of the war. Additional ships were chartered, and service was maintained between Antwerp and Buenos Aires. Capitalization.— 5,000,000 francs shares; loans, 2,000,000 francs (from the Belgian Government). Shares listed on Brussels Bourse. Head office (year 1914) : Antwerp, Belgium. 538 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. STATISTICS OF IMPORTANT LATIN-AMERICAN BANKS. The following table gives statistics with regard to six of the most important banking institutions in the Latin- American field: Capital and reserves. Deposits. 1915-16 1916-17 1915-16 1916-17 £3,833,827 12,903,750. 2, 093, 383 307,417 2,650,000 3,800,000 £3,833,827 12,929,845 2,095,174 294, 536 2,650,000 3,800,000 £9,076,322 17, 494, 107 7, 502, 838 125, 740 8,480,897 20,581,475 £14,114,982 21,563,046 8,029,128 110,025 8,602,124 20,369,465 Total 25,588,377 25,603,382 63,261,379 72, 788, 770 Banks. Cash. Investments. Discounts and advances. 1915-16 1915-17 1915-16 1916-17 1915-16 1916-17 Anglo-South American. . Banco Espafiol del Eio £2,184,625 7,755,246 3,441,908 33,352 5,498,060 9, 519, 149 £3,037,453 7,474,521 2,954,927 36,819 6,359,940 8, 267, 245 £1,840,383 767, 328 £2,200,333 775,805 £13,424,098 19, 459, 221 9,721,404 397,072 7,040,968 20,759,089 £18,816,402 21,156,052 11,620,639 382,480 6,459,540 21,242,530 British Bank of South Commercial Bank of Spanish America 42,641 41,976 Total 28,432,340 28,130,905 2,650,352 3,018,114 70,801,852 79,677,643 The following table gives the quotations of the shares of four British South American banks: Banks. Amount of share. Paid up per share. Price, July 30, 1914. Price, Sept. 30, 1916. Price, Sept. 30, 1917. Yield. £10 20 20 25 £5 10 10 15 £7} 22} 29), 49 £6| 181 25i 39 £7J 18 24 35 Pa cent. 6ft The data concerning the banks mentioned in this appendix have been largely taken from the London -Economist of October 20, 1917. The banks of South and Central America have been discussed at length in the various chapters of this monograph, but it is believed that complete balance-sheet statements of a number of the more important institutions will prove of value to those inter- ested in the banking situation. BRITISH BANK OF SOUTH AMERICA (LTD.). The report for the financial year ended December 31, 1916, states that the gross profits, after allowing for rebate of interest on current bills and drafts, for interest on deposits, and making ample provision for bad and doubtful debts and contingencies, amounted to £324,631; this, with the balance of £90,784 brought forward from the previous year, made £415,415. After deducting all charges of the head office and branches, amounting to £181,825, income tax and Government taxes in Brazil and the River Plate (together £23,351), there re- mained £210,239 available. A dividend on account of 10s. per share, amounting APPENDIXES. 539 to £50,000, was paid in September, 1916, and it was recommended that a further dividend of 14s. per share be declared payable on April 20, making for the year a distribution of 24s. per share, or 12 per cent, subject to income tax, on the* paid- up capital of the bank of £1.000,000. After paying the above dividend there remained the sum of £90,239, which the directors carried forward. Following is the balance sheet as of December 31, 1916 : Liabilities. Amount. Assets. Amount. £1,000.000 1,000,000 95, 174 8,029,128 2,865,181 1,631,348 160, 239 Cash in hand, at bankers and at call . Bills receivable in hand, and deposit- ed with the company's bankers £2,954,927 4,953,215 6,667,424 Amount due on current and deposit ]?reehold and leasehold premises in London and South America at cost, 205,504 Profit and loss account, as per state- 14,781,070 14,781,070 PROFIT AND LOSS ACCOUNT. Debit. Amount. Credit. Amount General charges at head office and the • branches, including directors' re- £181,825 11,815 11, 536 50,000 160,239 £90,784 Gross profits, after allowing for rebate of interest on current bills and dxalts , in teres t on deposits, and am- ple provision for bad and doubtful Government taxes in Brazil and the 324, 631 Dividend on account for the half year ended June 30, 1916 415,415 415, 415 ANGLO-SOUTH AMERICAN BANK (LTD.). Following is the balance sheet of the Anglo-South American Bank as of June 30, 1917 : Liabilities. Amount. Assets. Amount. Issued capital — 450,000 shares of £10 £2,250,000 1,400,000 183, 827' 5,981,166 1, 295, 830 14, 114, 982 40,713 393,317 Cash in hand, at bankers, and at call. £3,037,453 9, 309, 600 Investments: English and foreign Government, railway and other securities, £1,804,341; holdings in foreign banks and kindred companies, £705,992— £2,510,333; less in- vestments reserve, £310,000 Liability of customers for acceptances, Special reserve, on account of deprecia- Bills payable — drafts on head office and Branches, £5,643,122; drafts on London and foreign bankers, £338,- 044 2,200,333 1,295,830 9,506,802 309,817 Acceptances on account of customers. . Current, deposit, and other accounts . . F ebate of interest on bills , etc. , not due. Profit and loss, as per account below, £460,817, less interim dividend paid on Apr. 24, 1917, £67,500 Bank premises, office furniture, etc... Liability on bills rediscounted, on un- called capital, on investments held, and guarantees, £4,681,163, of which £4,436,728 has run off. 25,659,835 25,659,835 Notes.— The difference between the assets and liabilities in Chile is talen at the rate of exchange current at the date of the accounts, viz, 12|Jd. with the exception of such portion as represents the capital employed in Chile, which is "now taken at 18d. The special reserve of £183,827 is sufficient to write this capital down to lOd . per dollar. Out of the above assets £1,576,356 have been lodged: As guaranty to the Chilean Government for due payment of drafts issued for duties .£419,538; for other purposes (amount of lien), £1,156,818— £1,576,356. 540 INVESTMENTS IN LATIN AMERICA AND BRITISH WEST INDIES. LONDON AND RIVER PLATE BANK (LTD.). Following is the balance sheet of the London and River Plate Bank, as of September 30, 1916: Liabilities. Amount. Assets. Amount. Capital, 120,000 shares of £25 each, on which £15 per share has been paid. . £1,800,000 2,000,000 3,078,267 44,022 1, 595, 153 19,937,662 431,803 9,039 3,324,085 59, 614 352,958 Cash on hand, at bankers, and at £8,267,245 Bills receivable, bills discounted, ad- vances, securities, etc v after deduct- ing provision for contingencies Bills receivable on London and con- tinent not yet liquidated in conse- Acceptances — account branches Acceptances— customers' drafts under 21,242,530 Bills advised — drafts in transit Current accounts, etc., and deposits in 65,813 3.324,085 Current accounts and deposits at head Bank premises, including furniture... 332,930 Montevideo branch — local currency Bills for collection on account of cus- Rebate of interest on bills not due 33,232,603 33,232,603 Note. — Contingent liability in consequence of the war, as indorsers of foreign bills negotiated, £13,665. Contingent liability on bills guaranteed, £41,809, of which £23,461 has since run off. COMMERCIAL BANK OP SPANISH AMERICA (LTD.). Following is the balance sheet of the Commercial Bank of Spanish America as of June 30, 1916: Liabilities. Amount. Assets. Amount. £261,417 119 33,000 110,025 91,324 2,946 £36, 819 41,976 33,753 £1 eaoh, fully paid, £259,979; 1,438 "B" shares of £1 each, fully paid, £1,438 Investments taken at market valuo at June 30, 1916, where quoted, Loan and other accounts, including balances at branches, £373,727; less written off by transfer of suspense 348,727 4,060 £1,000; suspense reserve account, £11,000— £12,000 Goodwill account, £50,677;less amount received re conversion of 49,239 "B " shares, £24,620 26,057 7,439 Expenses re issue of new capital (stamp duty, underwriting commission, etc., 498,831 498,831 PEOFIT AND LOSS ACCOUNT. Debit. Amount. Credit. Amount. Charges, including directors' fees, rent, £10,044 1,858 2,727 1,000 11,000 2,946 Balance brought forward from preced- £3,893 Gross profits for the year ended June 30, 1916 25,682 29,575 29,575 APPENDIXES. 541 LONDON BANK OF CENTRAL AMERICA (LTD.). Following is the balance sheet of the London Bank of Central America as of September 30, 1916 : Liabilities. Amount. Assets. Amount. Capital 27,570 shares of £1 each, fully £27,570 498 916 6,730 244 2,386 347 £341 Shares of Banco Salvadoreiio held for Shares of Commercial Bank of Spanish America (Ltd.), held for distribution toshare holders, including 1,193 "B" shares converted into " A " shares by payment of 10s. per share out of the moneys in hand belonging to the Shares of Banco Salvadoreiio held for Shares of Commercial Bank of Spanish America (Ltd.), held for distribution to shareholders ». 2,386 31,403 3,838 Profit and loss account — Balance brought forward from last year, £41; income for the year, £618— £659, less "A" shares of Commercial Bank of Spanish America, taken at par 38,691 38,691 BANCO ESPANOL DEL RIO DE LA PLATA. The report of the directors states that the net profits for the financial year ended June 30, 1917, amounted to £485,837, which, after deduction of £238,206 distributed in January, 1916, leaves a balance of £247,631, which the directors proposed to allocate as follows : Ninety per cent to the shareholders, £214,469 ; 2 per cent to the directors and auditors, £4,766 ; 2i per cent to the staff pension and benevolent fund, £6,553 ; 1 per cent to the founder, Mr. A. J. Coelho, £2,383 ; one-fourth per cent to contributions to charity, £596 ; 4 per cent to the reserve fund, £9,532 ; total, £238,299. The balance of £9,332 was to be carried forward. The statutory reserve fund was to be increased to £4,209,219. Following is the balance sheet as of June 30, 1917 : Liabilities. Amount. Assets. Amount. Capital subscribed Current accounts, and deposits at fi xed term Rebate— Corresponding to next half year Conversion account— Balance Reserve fund Sundries Profit and loss balance (after paying interim dividend ol 2\ per cent in January, 1917) £8,730,158 21,563,046 146,633 3,520,501 4,199,687 933,261 247,631 9,340,917 Cash, at head office, Argentine and European branches Branches Shareholders (liability on uncalled capital) Bills discounted and advances in cur- rent account Conversion account — Balance Freehold property, furniture and fit- tinss Sundry securities Sundries — Correspondents and ac- counts in process of liquidation £7,474,521 3,042,510 161,840 21,156,052 3,520,501 1,176,270 775,805 2,033,388 39,340,917 PROFIT AND LOSS ACCOUNT. Debit. Amount. Credit. Amount. Interest, amortization of furniture, fit- tings, and premises, general charges. £398,417 62,022 221,532 595 6,551 9,528 247,631 £3,394 755,877 186,465 Allowance for bad and doubtful debts. Distributed in January last: Charities, as per articles of associa- Stafl pension and benevolent fund. 946,276 946,276 542 INVESTMENTS IN LATIN AMERICA AND BEITISH WEST INDIES. LONDON AND BRAZILIAN BANK (LTD.). The report presented to the meeting held on May 1, 1917, states that the accounts show an available balance of £498,850 (including £297,571 brought forward from the preceding year). An interim dividend of 14s. per share, amounting to £87,500, was paid in October, 1916. The directors recommended a further payment of 14s. per share, being a dividend at the rate of 14 per cent per annum. The directors also recommended the payment of a bonus of 4s. per share, thus making a total distribution of 16 per cent per annum, subject to income tax, on the paid-up capital of the bank. The above payments absorbed £200,000, leaving a balance of £298,850 to the credit of profit and loss new account. Following is the balance sheet, as of January 31, 1917 : Liabilities. Capital— 125,000 shares of £20 each; paid tip £10 per share Reserve fund Current accounts and deposits in cur- rency at branches, £8,335,728; cur- rent accounts and deposits at head office, £266,396 Bills payable Agents and sundry accounts Bills for collection on account of cus- tomers Profit and loss, £498,850; less divi- dend (interim) paid to July 31, 1916, £87,500 Amount. 250, 000 400,000 8,602,124 3,538,408 880, 499 3, 150, 916 411,350 19,233,297 Assets. Specie and cash at head office and branches Bills receivable Bills discounted, loans, etc Cash and remittances in transit, etc . Bills for collection, as per contra Bank premises at head office and branches , Furniture at head office and branches . Amount. £4,941,529 2,9S0,301 6,459,540 1,418,411 3,150,916 261,002 1,598 19,233,297 Note.— Contingent liabilities not included in balance sheet : As indorsers ol foreign bills negotiated, £90,818. Staff pension and benevolent fund trust, £140,000. PROFIT AND LOSS ACCOUNT. Debit. Amount. Credit. Amount. £255,431 45,355 87, 500 411,350 £297,571 Profit to .Tan. 31, 1917, after providing for rebate of interest on bills dis- counted not due, and bad and Dividend (interim) for the half year ended July 31, 1916 502,065 799,636 799,636 BANCO ITALIANO DEL URUGUAY. The Banco Italiano del Uruguay, of Montevideo, has an authorized capital of 5,000,000 Uruguayan gold pesos, of which 3,000,000 pesos is paid up. The re- serve fund is 996,250 gold pesos and the provision fund 150,000 gold pesos. BANCO ITALIANO, LIMA, PERU. Following is the statement of accounts of the Banco Italiano, of Lima, Peru, as of June 30, 1917. The figures are expressed in Peruvian pounds, equivalent to the pound sterling ($4.8665 in United States currency). Liabilities. Amount Assets. Amount. £p. 200, 000.— 113,079.3.27 226, 910. 0. 00 1,789,884.9.02 1,297,347.6.79 151, 065. 6. 39 Cash in hand and at bankers Gold deposit as guaranty for bank- £p. 917,937.4. 55 226,910.0.00 427, 197. 4. 63 415, 260. 7. 10 1,297,347.6.79 493,634.2.40 Investments and other accounts. . . 3, 778, 287. 5. 47 3,778,287.5.47 APPENDIXES. 543 BANCO DE CHILE. Following is the balance sheet of the Banco de Chile .as of June 30, 1917: Liabilities. Deposits: At sight and in current account Fixed. In current account and at sight (gold) In current account in London atlSd Clearing balances outstand- ing Deposit of bonds and docu- ments Retirement fund Various creditors Suspense account Interest, discount, etc Government Issue Depart- ment Government Issue Depart- ment fa/c customers) Pad-up capital Reserve fund Carry forward from last ac- count Unpaid dividends Front and loss account Paper 101,999,533 75,905,035 .1,107,860 193,144,925 2,351,572 11,549,874 6,000,000 3,000,000 40,000,000 22,000,000 2,217,933 78,931 3,801,179 463, 156, 842 Gold pesos of 18 d. 22,148,381 7, 647, 453 237,935 16,401,962 2,862,883 76,869 5,000,000 54,375,483 Assets. Cash: Treasury notes Fiscal notes Gold disposable in Chile and London Silver At short notice in Europe. . . Checks and balances dispos- able in other banks in Chile and abroad Investment account Bonds in custody and guar- anty Real estate Furniture Books and stationery Advances and other docu- ments In gold in Chile and Lon- don at 18d (Clause 10 of bank act) (Art. 14, law 1054 of July 31,1898) Agencies and branches Suspense account Interest discounts, etc Discount of Government ad- vances to nitrate producers. Advances to other banks Treasury notes, law 3094 of April 29, 1916 Paper 1,778,500 20, 136, 881 1,322,479 10,302,159 5,829,649 193, 144, 925 11,098,149 512,474 379, 424 181,823,017 1,091,463 178,125 6,456,090 4,879,067 788,940 358, 500 77,000 23,000,000 463,156,842 54,375,483 Gold pesos of 18 d. 5,656,002 1,996,000 16,311,661 5,753,667 4,053 23,041,266 i,'