In 1890 there was no money to meet the interest and general prostration ensued.

It is difficult to ascertain the debt of the republic; but if the accounts given in the English publications are correct the debt is greater in proportion to its population and wealth than that of any other country in the world. The only hope of the Argentine Republic is to wipe out the debt by insolvency and bankruptcy.

PERU.

A strip of land with 1200 miles of sea coast, without a natural harbor, and 200 to 300 miles wide, consisting of a plain, mountains, a plateau, and still another range of mountains-this is Peru.

In the west, where the rain never falls, are numerous small rivers, to-day mountain torrents, to-morrow dry, rocky beds.

Between the lofty ranges of snow mountains is the highest plateau in the world, after Thibet. The southern part of this plateau is dry and desolate, the northern portion is well watered, with beautiful streams running now through deep cañons and then through rich, fertile valleys steadily descending toward the northeast; the valleys growing ever broader, warmer and more delightful, until the montaña is reached, only a few hundred feet above the Atlantic, where the streams have become rivers, navigable to the ocean.

The western slope of the mountains is dry and barren, so that breadstuffs and provisions are imported from Ecuador on the north, or from lower Chili, far to the south. Yet no other country has contributed so much to the world's fertility; for here are the great deposits of guano and nitrates, more valuable than mines of gold and silver. These deposits yielded for over thirty years a net annual revenue of $20,000,000.

The eastern slope, rich and fertile, producing every tree and flower, all fruits and vegetables grown in any part of the world; in the mountains, mines of gold and silver, platinum and cinnabar, copper and tin, lead and iron, coal and petroleum, nitrates and asphalt: a bankrupt nation in the midst of untold wealth-such is Peru.

To bring the minerals down to the ocean, tens of millions of dollars were expended on thirteen roads; but though none of them were ever finished, they reached a few of the poorer mines. Seven of these roads were built by the government, the others by private parties.

National Bankruptcy in the Land of Gold.

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The sales of guano and the production of gold and silver made Peru a proud and wealthy nation. Everything prospered until the war with Chili, from 1879 to 1883, ending in the defeat of Peru and the loss of a portion of her'territory, including a large part of her guano deposit. She was unable to keep her railroads in operation, much less to extend them, or to pay the interest on her bonds; and thus bankruptcy followed defeat. At last, after fourteen years of default and six years of negotiation, a contract was concluded with Peru by Mr. M. P. Grace, of New York, in January, 1890, on behalf of the bondholders. The bondholders became concessionaires, and in consideration of the release of the bonded debt due to them by Peru, receive valuable concessions, of money, of mines, of railroads, of lands and of guano. These concessions include among other things a government subsidy of $400,000 a year, secured from the customs of Callao; the mines of Cerro de Pasco, which have yielded a yearly average of $2,000,000 for over one hundred years; the entire railway system (769 miles in length) of the state; a grant of 5,000,000 acres for the extension of the Lake Titicaca railroad; a grant of 4,500,000 acres for the extension of the Central or Oroya railroad to the navigable waters of the Ucayala, one of the main tributaries of the Amazon; the exclusive control of the guano deposit until 2,000,000 tons have been sold, from which: they expect to sell at least 80,000 tons a year, which will net $1,000,000. The concessionaires on their part agree to liquidate the Peruvian debt, to repair the railroads, and construct 974 miles in extension of the existing system at an estimated cost of $16,000,000, and to assume certain other obligations to a limited amount.

This, perhaps the most remarkable settlement ever made between a bankrupt nation and its creditor, is due largely to Mr. Grace, and cannot fail to develop the resources of Peru and restore her days of prosperity.

TRADE RELATIONS WITH THE UNITED STATES.

It appears from the foregoing statement that all the carrying trade to and from South America, by water, is by foreign steamers; that only four of these are American lines; that the railroads are generally owned and operated by Englishmen; that the bankers and merchants are Englishmen or Germans; that

many of the mines, cattle ranches, coffee plantations and other estates are owned by non-resident foreigners; and that the largest consumer of South American products is the United States, although this country sells few of its manufactures and products to South America.

The English steamers, in the usual course of trade, load with English dry-goods consigned to English houses in South America, where they are sold and the proceeds invested in coffee and other products, which are sent in the same vessels to the United States; there sold, and the money invested in our produce for carriage to England. The English therefore obtain the profits on manufacture, on the freight to South America, on the sale of the goods in South America, on the freight from South America to the United States, on the sale of those goods, and finally on the freight of the American breadstuffs carried to Europe. For the successful prosecution of any trade between two countries, it is essential that each shall produce what the other wants: Thus, we raise breadstuffs which are not grown on the Caribbean sea nor in the valley of the Amazon, nor in Peru or upper Chili, and we also manufacture goods required in all parts of South America, where they have few factories; there, coffee, wool, India rubber, cacao and other articles are produced, which we require. Here, therefore, are the factors necessary for a prosperous trade. Such a trade we formerly enjoyed with South America: In 1852, six hundred United States vessels entered the harbor of Buenos Ayres, or more than twice as many as those of all other nations combined; now only two per cent. of the shipping entering that harbor belongs to us. Our war came, iron steamers took the place of wooden sailing ships, we levied a duty on coffee and rubber, South America levied a duty on our manufactures, other countries subsidized lines of steamers, while we refused all subsidies; and our trade with South America rapidly fell off, as freights were carried cheaper in foreign than in American ships, and the trade of South America passed from the United States to England, Germany and France.

It is said that we cannot regain this trade, because we cannot, without protection maintain our own manufactures, much less compete with the Europeans in an open market; and therefore that it will be a waste of money to subsidize our vessels. But the larger the market the cheaper we can manufacture, and we can

Possible South American Trade.

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surely find a large and new market for our breadstuffs. It is worth while to make the experiment at least, to give our vessels the same subsidy and protection that has been given to the European lines, and to our merchants and bankers, an opportunity to regain the trade with South America. At first the odds will be greatly against us; but if we show the same energy and ability in cultivating trade with South America that our fathers exhibited, and that we have shown in other directions, we must ultimately succeed.

It is now proposed to tax the products of South America, unless the South American states reciprocate and admit our breadstuffs and manufactures free. If this scheme can be carried out, a large and prosperous commerce will be established between North America and South America, and American houses will be started in the large cities to dispose of our manufactures and ship the products to South America. By this interchange, our manufacturers and farmers will find a market for their goods and products, our mercantile navy freight for its vessels, and our bankers and merchants a profitable business in the large cities of South America.

RAILROADS.

We have already referred to the several railroads which start from the little ports on the Pacific coast and run up the valleys toward the Andes. Three of these, among the most remarkable roads in the world, ascend to a greater elevation than any others, and to a height which in Europe or the United States, would be above the snow level. They were intended to reach the gold and silver mines between the Andes and Cordilleras.

The first, called the Oroya or Central railroad, 111 miles in length, starts from Callao on the Pacific, and crosses the Andes, at an elevation of nearly 15,000 feet, to the plateau between the Andes and the Cordilleras. It is expected that this road will be extended to the navigable waters of the Amazon.

Three hundred miles southward, the second road runs from Molendo, Peru, by Arequipa to Puno on Lake Titicaca, and thence northward on the plateau 407 miles to San Rosas, on the route to Cuzco. The road from Mollendo to Arequipa runs through a country so destitute of water that the only supply for

4-NAT. GEOG. MAG., VOL. III, 1891.

the engines and stations is by an iron pipe 8 inches in diameter, and 50 miles long, running from an elevation of 7,000 feet to the sea-coast.

Seven or eight hundred miles south of Mollendo, a line runs from Valparaiso in Chili to Buenos Ayres, 870 miles. It crosses the Andes through a tunnel two miles long, at an elevation of 10,568 feet above the sea; after leaving the mountains it runs over the pampas two hundred miles, without a curve or a grade over three feet above or below the plain, and will soon be completed from ocean to ocean.

From Rio de Janeiro several roads have been constructed over the mountains west of that city to different parts of Brazil. One of these runs westwardly toward Bolivia.

Bolivia has recently granted concessions for the construction of a road from La Paz to connect on the west with the Peruvian roads at Lake Titicaca, and on the east with the Brazilian lines on the Pacific; and thus ultimately a road will run from Mollendo on the Atlantic ocean by Lake Titicaca and La Paz to Rio de Janeiro.

There are now from 6000 to 7000 miles of road in operation in the Argentine Republic, 5000 to 6000 in Brazil, and 3000 to 4000 miles in the other states, making a total of about 15,000 miles of railroad in operation.

A proposition is now before the public for the construction of the Pan-American railroad, from the Caribbean sea southward to the Argentine Republic to connect with the Peruvian, with the Brazilian, and ultimately with the Argentine roads.

The route that seems to be most feasible starts at Cartagena, where there is a splendid bay and harbor, within three days sail from Galveston and six days from New York. It follows the valley of the Magdalena river 800 miles to Dividal, 1700 feet above the sea. Here, near the head waters of the Magdalena, the route crosses the eastern Cordilleras at an elevation of about 6,500 feet to the head waters of the Caqueta, or Yapura, a branch of the Amazon, and thence runs down that river 375 miles to the mouth of the Engarros, only 550 feet above tide-water. From the Caqueta river, the route passes through Ecuador to Iquitos, Peru, crossing fourteen tributaries of the Amazon. From Iquitos the route ascends the Amazon and the Ucayle, one of its southern tributaries, 500 miles to Napal, then continues across the montaña