Export tax, at 1.6904 sucres per quintal..........

Fire insurance on supposed valuation of 25 sucres per quintal,

at one-half of one per cent................................... Commission, at 4 per cent...

Total............

1.70= 298.86=

.83 145.00

Add price of 17,680 pounds of cacao at 25 cents (Spanish).................... 4, 420. 00=2, 150. 99 Total cost f. o. b.......... 5,060. 65=2, 462. 31

This is exclusive of charges for marine insurance and freight.

GUAYAQUIL, June 28, 1899.

PERRY M. DE LEON,

Consul-General.

PROPOSED PORT AT MONTEVIDEO.

On the 22d instant, the official paper of the Republic of Uruguay published the report of the Minister of Public Works relative to the proposed new port for Montevideo. The report was approved by the President and his cabinet and is now being considered by the General Assembly. The document is a ponderous one, and for the present I will give only the following epitome of its principal features:

Dr. Pena, the Minister of Public Works, states that when he came into office in March last, and the problem of the port was first formally presented to his consideration, he found that, by the operation of the law of July 14, 1894, amended by that of September 30, 1895, the technical part of the problem had already been very thoroughly dealt with, extensive surveys having been made by the commission appointed for the purpose under the direction and with the assistance of the eminent engineers Herr Kummer and Mr. Guérard. Herr Kummer was director of the hydraulic section of the Ministry of Public Works in Prussia and privy councilor and relator in the German Ministry of Public Works. Mr. Guérard was general inspecting engineer of roads and bridges in France, and director of the port works at Marseilles. The engagement of two such eminent specialists, who were assisted in their labors by the national staff of engineers, should place the Government beyond reproach as regards the technical side of the problem. The result of these surveys was the scheme elaborated by Mr. Guérard, which had been subjected to ample public debate and criticism from every point of view. The principal objections raised to the scheme had been reviewed at length.

by Señor Varela in the memorandum published last year, and, for the most part, had been solved in favor of Mr. Guérard's scheme or by the introduction of minor alterations approved by Mr. Guérard. Reporting on this, in September, 1898, Herr Kummer had expressed his firm belief that the carrying out of the Guérard scheme was to be warmly recommended as absolutely the best for the port of Montevideo from the technical and economical point of view. On this side of the question, therefore, it was not necessary to say more.

Having justified the acceptance of the Guérard plan, the minister proceeds to examine with great minuteness the financial part of the scheme. The first estimate presented was for $16,000,000, which was considered far too high; but by omitting some of the docks and works originally designed, this was reduced to $12,000,ooo, another $700,000 being required for land constructions and annexes. Various schemes for raising the money were discussed, all more or less based on the port dues. After carefully considering these, Señor Varela resolved to put them aside, considering this basis impracticable, though the dues might be taken to form part of the fund required. For this reason the proposals of Messrs. Greenwood and Pearson were rejected in form, though accepted in principle, awaiting modifications. These proposals were withdrawn before the revolution of 1897.

Señor Varela suggested the restoration of the 21⁄2 per cent additional import duty (which he proposed to increase to 3 per cent), and the establishment of a new export duty of 1 per cent. With these, he calculated on an annual revenue of some $996,000 as base for the financial operations. With this base, he proposed the issue of a loan of $15,400,000, at 6 per cent interest, and fixed annual amortization of £50,000, or, say, $235,000, the bonds of which would be issued gradually as required to pay for work done. Calculating the cost of the port at $15,000,000, the works would be terminated in eight years, at the end of which period there would be left in circulation bonds for $7,900,000.

The above was the original scheme, as outlined by Mr. Varela while occupying the office of Minister of Public Works. The amendments or changes suggested by the present Minister of Public Works are outlined in what follows:

The cost of constructing the port is reduced to $11,000,000, which will provide for a port accommodating easily a traffic of 1,200,000 tons. The technical expenses will consume some $590,000 more, or 5.36 per cent on the cost of the works, against 71⁄2 per cent in the Madero Port of Buenos Ayres. To meet this expense, the proposed 21⁄2 per cent additional import duty and an export duty of 1 per cent will be willingly submitted to by commerce and production, in view of the benefits the port will bring. His plan also allows for a gradual reduction of duties as the position of the treasury improves, or as increased commerce augments the revenue. These

two taxes will be set aside to form the port fund, under control of a special commission, and any part of the fund not employed will be invested in consolidated debt, so as not to remain unprofitable.

The expenditure required for the construction works is calculated as follows: First year, $200,000; second year, $700,000; third year, $1,400,000; fourth year, $2,400,000; fifth year, $3,000,000; sixth year, $2,300,000; seventh year, $1,000,000; total, $11,000,000. To this must be added $598,000 during eight years for expenses of the technical and financial commissions.

The revenue from the additional duties is calculated in round figures, taking as base the average of the customs revenue for the period 1896-1898, at $850,000 per year, or $6,800,000 in eight years. It is expected that $322,000 will be gained as interest on the surplus accruing in the first three years, $400,000 from sale of lands redeemed from the bay, and $1,100,000 for rent or revenue of the port in the last three years. These bring the total resources up to $8,622,000.

To meet the difference between this sum and the $11,590,000 cost of construction works and commission labors, Dr. Pena puts aside as superfluous the port loan of $15,000,000 proposed by Señor Varela and professes himself satisfied with the issue of port obligations to the nominal sum of $5,500,000, issued at 73 per cent of their face value. The service of these at 6 per cent interest and 1 per cent accumulative amortization would require $385,000 annually, against which there is a net revenue from the port fund of $500,000, leaving a surplus of $115,000. This entirely guarantees the service, though there will also be a revenue available from the light-houses for which an appropriation is about to be made by the State. The $5,500,000 obligations issued at 73 per cent will produce $4,015,000 cash; they will be extinguished in thirty years, and the difference imputable to interest is $7,535,000, which works out at 64 per cent on the sum received.

At the termination of the eighth year, the revenue of the port will give enough to meet the service of the obligations and the cost of preservation and repairs of the works, estimated by Mr. Guérard at some $100,000 per year. There will remain entirely free the revenue from the additional duties, calculated at $850,000, but which by that time should have risen to $1,000,000 per year, and this may be applied to extensions of the port, as provided in the scheme, or to any other purpose.

Dr. Pena -concludes his memorandum by saying that the port works should be accompanied by other reforms and schemes, and by improved transit in the interior, which will stimulate production and reduce its cost, and thus help to feed the port itself.

Referring to this report by Dr. Pena, the Montevideo Times says:

For twenty years at least, the idea of building a new port for Montevideo has been more or less to the fore, it being generally recognized that the bay in its present condition, which is little better than that of nature, afforded neither the shelter nor the facilities requisite to sustain the commerce of the capital or to compete with the ports constructed at Buenos Ayres, La Plata, and Ensenada. Moreover, it was showing a tendency to fill up, and indeed is no longer available for modern ocean-going vessels of deep draft, which have to perform their operations of loading and unloading in the outer roads, a process both costly and inconvenient. The building of a new port is therefore an imperative necessity for the commerce of the Republic, to prevent Montevideo, the principal gate of that commerce, from sinking into a very secondary condition as compared with her Argentine rivals, though her natural location is far more advantageous than theirs.

One government after another has made more or less of an effort to solve the

great problem, but none with the least approach to success. failure there were three principal reasons:

For this repeated First. Continual political strife and instability, which absorbed the energy of the Government or prevented the carrying out of any settled policy.

Second. The want of any scientific basis for the plans; for, although numerous schemes were presented from time to time, they were, without exception, mere fantasies, based on superficial and unreliable surveys and data, or even on none at all, and therefore merely guesswork.

Third. The financial difficulty, which worked in more ways than one. It was generally imagined that the building of the port would cost at least $16,000,000 to $20,000,000-some of the schemes presented ran up to $40,000,000-and there was no government that had the financial ability or enjoyed sufficient confidence to procure the sum on any possible terms. Moreover, previous governments, without exception corrupt, regarded the building of the port as a means of personal enrichment; it was to be a big job-un gran negocio—and this factor swelled the expense, made it more difficult to raise the money, and caused the general public to regard their efforts askance and with distrust.

For the conquest of the second difficulty, we must thank the much-abused Barda Government. It was perhaps the only good thing it did for the country, and even this was done with much unnecessary extravagance. However, as Dr. Pena points out in his memorandum, the port scheme has now been placed, for the first time, on a scientific basis. The plans prepared by Mr. Guérard, and which have been accepted for the technical side of the scheme, are naturally open to criticism and objections, as such plans ever must be; but no one can say that they have not been carefully and scientifically prepared by competent persons.

The political difficulty we must pass over. For the moment, the horizon is sufficiently clear-clearer than it has been for many years—but there is no telling how long this may last or what incident may occur before the expiration of the eight years allotted to the building of the port, to arrest or even to overthrow the whole scheme. For this we must trust to Providence.

There remains the third or financial difficulty, and it has been the merit or the fortune of Señor Cuesta's Government to find a solution for this that seems both reasonable and practicable-we may even say highly favorable. If the new port can not be made on the present basis, we may doubt if it will ever be made at all. The credit of this solution may be divided between the present minister and his predecessor, Señor Varela, the latter initiating and the former completing it. They may specially be congratulated on having got rid of the idea, which had long been a stumbling block, that the port "must pay for itself"—that is to say, that it could be built out of any financial combination having for basis the proper revenue of the port.

As we understand Dr. Pena's financial scheme, it may be summarized as follows: The total cost of the port is reduced to $11,590,000, spread over a period of eight years-far less a sum than was ever imagined possible before. To meet this sum, he proposes to utilize the additional import duty of 221⁄2 per cent and a new export duty of 1 per cent, yielding an annual revenue estimated at $850,000, or in eight years $6,800,000. At the end of the eight years these taxes will be freed, for application to extension of the port, for other administrative purposes, or to be rescinded altogether to the benefit of commerce and production. Other items—namely, interest on unemployed fund, sale of redeemed lands, and revenue from the port itself during the last three years-bring the port fund up to a total of $8,622,000.

But, as this fund is obviously insufficient to build a port costing $11,590,000, he proposes to make up the balance by issuing port obligations (or debentures) for $5,500,000 nominal, which, issued at 73 per cent, will yield $4,015,000 cash. The

service of these obligations, 6 per cent interest and I per cent annual accumulative amortization, will be $385,000 annually; but this will not be any addition at all to the present national-debt service, as it will be met, in the first instance, out of revenue accruing from the port fund (that is to say, the taxes above mentioned) and, at the end of the eight years, out of the revenue of the port itself, which will still leave sufficient to keep the port in repair. At the end of thirty years, the obligations will be entirely redeemed, leaving the revenue of the port free. As to the issue of the obligations, this is not expected to meet with any difficulty while the Government maintains the high degree of confidence it now enjoys, and, for the matter of that, they should be covered by local capital, as it is hoped will be mainly the case.

Minor details apart, this, then, is the outline of Dr. Pena's financial scheme, and for our part we applaud it warmly. The only burden it imposes on the community, it will be seen, is the maintenance for eight years longer of the additional 21⁄2 per cent import duty, which already exists and is therefore no novelty, and the imposition of a I per cent export duty. Perhaps it might have been less prejudicial to general interests to have omitted the latter and made the import duty heavier; but in any case the burden is not a very heavy one and ought to be met willingly, in view of the great object.

Without doubt, if anyone had suggested two or three years ago that it was possible to build a new port for so little extra a burden as this, and without appealing to foreign capitalists for an extensive loan, increasing the national debt and the service thereof, or else so burdening the port itself as to nullify its benefits, he would have been regarded as a fool or a madman. And it may be put down as equally true that such a combination as the present would have been impossible to preceding governments, for reasons that we leave our readers to supply.

MONTEVIDEO, June 23, 1899.

WILLIAM R. FINCH,

Minister.

FOUNDRY AT MONTEREY.

The Monterey Foundry and Manufacturing Company is owned. almost wholly by Mr. James Meehan, of Kentucky. Previous to the purchase of the Monterey foundry in 1896, it was not a success financially. Immediately thereafter, however, it was remodeled, renovated, and enlarged. It now has a complete modern plant of American manufacture and represents an investment of $125,000. The plant comprises a foundry, machine shop, brass foundry, hammer shop, pattern shop, and a wood-working shop. About 235 men are constantly employed in this enterprise. Most of the skilled mechanics are Americans, who receive on an average from $5 to $8 per day. The laborers are all Mexicans and receive from 75 cents to $1 per day.

A general specialty and jobbing business is carried on. The specialties consist of sugar mills of all sizes, mining and smelting machinery, engines up to 25 horsepower, brass cock and fittings of all descriptions, school furniture, architectural ironwork, etc. Lo