Note 364 — Chapter XVIII

The Peruvian Government contracted three loans in London between 1822 and 1825, amounting to 1,816,000l., bearing interest at 6 per cent.

No interest was paid from 1825 to 1849, when the sales of guano had greatly increased the resources of Peru. In 1849 Señor Osma made an agreement with the bondholders to issue New Bonds at 4 per cent. per annum, the rate to increase ½ per cent. annually up to 6 per cent. Arrears of interest, about 2,615,000l., were to be capitalized, and Deferred Bonds to be issued to represent 75 per cent. of these arrears, and to bear interest at 1 per cent. per annum, increasing ½ per cent. annually up to 3 per cent.

In 1852 the Congress authorised General Mendiburu to effect a loan in London for 2,600,000l. to redeem the remainder of the 6 per cent. loan, and to refund other home and Chile debts.

The annual interest and sinking fund amount, respectively, to 267,000l. and 82,000l.; the payment of which is secured on the profits of guano sold in Great Britain.

There is also a French loan of 800,000l. secured on the profits of guano sold in France.

The whole foreign debt of Peru amounted to 4,491,042l. in 1857; and the domestic debt to 4,835,708l. The foreign debt is annually reduced by means of a sinking fund.