Total Amount of TradePeriod covered.(U.S Gold $)Year1901$183,760.00."1902114,585.20."1903814,733.88."1904652,854.33."1905768,677.60."19061,296,666.00."19071,223,565.00."19081,318,224.00."19091,116,717.00."1910 (half-year)560,570.00.
These figures refer to all the auriferous silver, copper ore, gold bars, gold and silver ore, lead ore, gold slimes, gold and copper slimes, gold and silver slimes, and lead, which had been mined in the country during the period mentioned.
I should say that modest fortunes await the enterprising capitalist—foreign for choice, since as a rule he is less easily discouraged by a run of temporary ill-luck—who exploits some of theantiguas—i.e., the ancient copper workings of the Salvadoreans which have been abandoned owing to lack of capital or labour. I know of many such opportunities which exist in the Department of Morazán, where already a considerable group of foreign companies and private individuals are working with occasionally remarkable success. With the modern machinery and reductionplant now available, certainly the greater part of these ancient workings might be made to pay something as a return upon the amount of capital expended upon them. To-day, also, there exists a first-class cart-road leading from these mines to the principal town, and thus transportation, which was formerly both costly and difficult, is now a matter of comparative facility.
In some of the iron ore mines one can find the old and wasteful Catalan system of reduction still in use, and yet with proper treatment, as was sufficiently proved when a trial shipment of ores was sent to England some years ago, as much as 87 per cent. of magnetic iron can be obtained from these ores. And the quantity of ore which they contain is apparently inexhaustible. I know of but two or three small smelters at present existing in Salvador, and, naturally, the industry of copper-smelting carried on in this primitive and limited manner proves anything but profitable. I am of opinion that the Government would encourage any serious attempt upon the part of foreign capitalists to exploit the unquestionably rich copper deposits of the Departments of Chalatenango and Cabañas, and such an enterprise might well be worth the attention of some British or United States mining capitalists. The latter are usually the more enterprising and plucky.
About twelve years ago there was registered in London a mining property covering 546 acres in Salvador, comprising a number of gold-bearing properties, with the title of Butters' Salvador Mines, Ltd., the principal owner being Mr. Charles Butters, a well-known American engineer, and who is the chairman of the company. From the very commencement of itsoperations, the company seems to have been eminently successful, and was able to distribute its first dividend in 1903, when 5 per cent, was paid. Since that date the dividends have varied from 40 to 80 per cent., that for 1910 being at the rate of 45 per cent., which compared with a similar rate for the previous year, but with an additional bonus of 233⁄4per cent. On account of the present year, 15 per cent. has already been paid as aninterimdividend, and, according to the recently-issued report, the ore reserves are now estimated to amount to 108,000 tons, and to carry a profit value of £400,000, or more than twice the value of the entire share capital.
At the end of last May, dividend "No. 87" of 33⁄4per cent. (= 9d. per share) was declared by the Board of Directors, who at the same time informed the shareholders that dividends will in the future be distributed quarterly instead of monthly, as has been customary in the past.
Butters Mine1.View of Butters' Divisadero Mines, Department of Morazán, Salvador.
1.View of Butters' Divisadero Mines, Department of Morazán, Salvador.
1.View of Butters' Divisadero Mines, Department of Morazán, Salvador.
Also Butters2.Butters' Salvador Mines, Santa Rosa, Department of la Unión, Salvador.
2.Butters' Salvador Mines, Santa Rosa, Department of la Unión, Salvador.
2.Butters' Salvador Mines, Santa Rosa, Department of la Unión, Salvador.
The inherent wealth of these mines is clearly demonstrated when one recollects that, in spite of the able and experienced management that has been the rule, many difficulties have had to be encountered and overcome, not the least of which has been the lack of labour, and, during the early part of last year, some serious trouble with the boilers at the mines. The consistently cautious policy which the directorate have adopted, notwithstanding the large dividends which they have been able to recommend, has resulted in their establishing the mines upon a thoroughly solid and business-like basis. It is worth remarking here that the whole of the existing plant and equipment, which are as complete and efficient as any to be found upon the American Continent, have been paid for outof revenue, and they stand in the books of the company at the present time at the ridiculously low price of £2,000.
The principal work which the management has in hand at the present time is cross-cutting the formation, with the object of finding split or parallel veins, and the discovery of such split veins has naturally much improved the position of the company. The whole policy of the management will now be devoted, for some years to come, to proving the mines in depth, and such, indeed, would have been undertaken before now but for the troubles to which I have above referred in regard to labour. The ore indications, which have so far been met with, are of a distinctly favourable nature, the most encouraging, perhaps, being the cutting of the famous Miguel ore-shoot at the 700 feet level. The width of this vein exceeds 3 feet, and it assays over 6 ounces. The Miguel shaft is now down nearly 800 feet, but the deepest working from which the ore has been stoped is the 600 feet level; the shaft will therefore give 200 feet of backs below the present workings.
At present between 25,000 and 30,000 tons of ore are being crushed annually, which yield on the average a value of 1 ounce 7 pennyweights. The working expenses have never been particularly high, owing greatly to the excellence of management and the economy of the reduction plant, which bears the name of the chairman of the company—viz., the Butters' Cyanide Process—but there are nevertheless hopes that these costs will be still further reduced in the near future. There is no question that the Butters' Salvador Mines rank among the most valuable ore deposits to be found in Central America, and it is noless sure that they are being managed in the most expert and most economical manner.
As to the financial situation of the company, the balance-sheet proves that the cash in hand on June 30, 1910, in Salvador, London, and San Francisco, amounted to £5,001, and that on the same date the stores in hand and in transit were valued at £32,228; sundry debtors in Salvador and London amounted to £812, andper contrathe amount owing to sundry creditors was £3,642. The profit and loss account showed a net profit for the period of £62,645; while the amount brought forward from the previous account, and which amounted to £19,042, being added to the net profit, showed a total available distributable balance of £81,677. The dividends which have been paid for the twelve months aggregated, as already mentioned, 45 per cent. upon the capital of the company, and which absorbed £67,500, thus leaving a carry-forward of £14,177.
It is worthy of mention that in the directors' report for the period ending June 30, 1910, a graceful tribute is paid to "the continued consideration which the Government of Salvador has extended to the company," and which testimony goes to prove what I have already indicated—viz., that the Government is anxious and willing to encourage in every legitimate manner sound foreign enterprise; but I go further, and say that I know of no other Latin-American Republic which has shown greater good-will to all foreign enterprise in all its phases than that of Salvador.
It is over seven years since the Butters' filter was introduced in connection with mining, and the process may now be met with in all parts of the world, and especially in Mexico, where I have seen it workingwith excellent advantage upon the famous Dos Estrellas gold-mine at El Oro, as well as in Brazil and in other South American countries.
The need of a filter of some sort was first forcibly presented to the mind of Mr. Charles Butters and his associates at their works in Virginia City, Nevada, U.S.A. The tailing being cyanided there was originally derived from the Comstock Mills, but it had been treated and retreated several times by the Pan-Amalgamation process; as it stands to-day in the dams, it contains about 75 per cent. of material that is leachable, and which may be designated as "slime." The slime is of an exceptional character. In addition to the difficulties connected with the solution of gold and silver contents, the mechanical condition was such that it gave trouble in settlement for decantation. The clarification produced by a coagulant such as lime was perfect, but the subsidence was so slow that the amount of solution recoverable in this way was not sufficient to make the decantation process a practical success. It was proved, in fact, that coagulation was not necessarily accompanied by good settlement.
After experimenting with several forms of vacuum filter units, both cylindrical and rectangular, there was evolved a form of filter which is the recognized present standard, and the preliminary plant of 336 leaves, which was erected at Goldfield seven years ago, is still in full operation to-day. As the filtration process is found working at the Salvador mines and in other parts of the world, the filter-leaf is made on a frame, the upper side of which is formed on wood, and acts as a suspending bar when the leaf is in position in the filter-box. The remaining three sides are made of1⁄2-inch pipe, perforated with holes and connectingto the vacuum pump. The filtering medium consists firstly of a porous mat of such size as to exactly fill the space formed by the pipe frame, and upon either side of this is placed a sheet of canvas, large enough to overlap the frame, around which it is securely sewn. The first containing-box which was used at Virginia City was an electrolytic precipitation-box, which was not needed for its special purpose, and was adopted for the use of the new filter. An air-compressor was converted into a vacuum pump, and with this equipment the vacuum filter of to-day came into existence.
From the beginning it proved a marked success, and the next step in its perfection was the designing of the large Goldfield plant to handle 800 tons of dry slime per diem. When designing the containing-box for the special purpose of the filter, the lines of the original box were slightly departed from as regards the shape of the hoppers, these being given sixty sides to facilitate the better discharge of the cake, and a quick opening valve of large area was placed at the apex of each hopper. Instead of a dry vacuum pump and gravity drainage, a wet vacuum pump was used, permitting the solution pump to be placed above the filter.
The cycle of operation is as follows: (1) Filling the box with pulp; (2) the formation of a cake on each side of the vacuum leaves by suction; (3) emptying the box of pulp and filling with weak solution; (4) drawing through the cake sufficient solution to displace all soluble values; (5) emptying the box of solution and filling with water; (6) drawing through the cake a small quantity of clean water to displace any solution held in the cake; (7) shutting off the vacuum and admitting water through the leaf connection, thereby throwing off the cake, which falls to thebottom of the box, and cleansing the canvas in preparation for the next charge; (8) opening the valve in hopper bottom of box, and allowing the residues to escape to the waste dam; (9) closing the valve, thus rendering the filter ready for the next charge of pulp.
It is a very unusual thing to find in the newer mining companies of Central America such up-to-date machinery and mining processes as are in use in the Republic of Salvador at the Butters' Salvador and the Divisadero Mines. The Government of Salvador has to be congratulated upon the wisdom it has shown in extending consideration to companies engaged in the development of its mines, and to practical men of the type of Mr. Charles Butters and his associates, to induce them to devote their money and their brains to the development of Salvador. The most modern processes and the most up-to-date machinery can be here found at work, and the Government is permitted, by the terms of the franchise which they have granted to the companies, to send Government students to attend at these works to complete their studies in mining and metallurgy. Among the processes at Butters' Salvador Mines are dry-crushing and roasting, electrolytic precipitation as well as electrolytic refining. The cyanide process with the Butters' Patent Vacuum Filter is found here treating gold ore without amalgamation, and making extraction of from 95 to 96 per cent. The mining at this property has been by adits principally. Electrical winding plants and electrical pumping plants are now installed at this property. Both at the mine and at the mill a high efficiency of working has been attained for many years.
At the Butters' Divisadero Mines, located twelve miles distant from the Butters' Salvador Mines, amuch larger quantity of ore, but of a lower grade than at the Salvador Mine, is treated, about 10,000 tons a month being handled on this property. The Government student has here the privilege of seeing ore, of about $5 a ton, mined and milled. A large electric plant is established, by means of which all the hoisting and pumping are carried on. A large quantity of water is encountered at this mine, and where formerly it was found impossible to handle the water by the use of Cornish pumps, it is now kept under control by means of the Sulzer electrically-driven centrifugal pump. Two sinking pumps, of a capacity of 600 gallons per minute each, have been installed, which are suspended from the surface, and are calculated to operate down to 600 feet in depth. These pumps lift 300 feet to the 300 feet level, and deliver to horizontal station-pumps erected at this level. The most modern electric-generating plant, hoisting, pumping, and ore-compressing plants, are at work upon this property. The mill is of the best-class construction, with a capacity of crushing between 8 and 9 tons per stamp, with tube-mills, Butters' Patent Vacuum Filter, and special methods of precipitation.
At both of these mines complete shops are established, including iron-foundry and wood-working machinery. The shops are competent to deal with the heaviest repair jobs on the machinery in use, and as many spares as are found economical to manufacture, so that a large staff of mechanics are kept busy in the shops.
In a new country like Salvador, it is absolutely essential, for the establishing of the mining industry upon a firm footing, that a large force of natives should be educated in the repair and manufacture ofthe machinery and extra parts in use at the mines. There are native Salvadoreans who have been educated in these shops, and they have become highly competent mechanics, able to cope with almost any difficulty occurring at the mines. The result of this education will be that less and less foreign help will be required to carry on the business in Salvador.
Anyone living in Salvador who desires to know of the "latest thing" in mining and metallurgy is permitted, through the arrangements which the Salvadorean Government has made with Mr. Charles Butters, to take up any course of study he may desire.
Transportation—Salvador Railway Company—Early construction—Gauge—Bridges—Locomotives—Rolling-stock—Personnelof railway—Steamship service—Extensions—Increasing popularity—Exchange, and influence on railway success—Importersversusplanters—Financial conditions—Projected extensions—Geological survey—Mr. Minor C. Keith's Salvador concession.
Transportation—Salvador Railway Company—Early construction—Gauge—Bridges—Locomotives—Rolling-stock—Personnelof railway—Steamship service—Extensions—Increasing popularity—Exchange, and influence on railway success—Importersversusplanters—Financial conditions—Projected extensions—Geological survey—Mr. Minor C. Keith's Salvador concession.
The means of internal communication are perhaps more apparent and more systematically undertaken than in any of the smaller States, Salvador possessing at present over 100 miles of railway track and a number of excellent roads and bridges, which are being added to and improved continually. The only organized railway system at present is in the hands of a British company, the Salvador Railway Company, Ltd, and its relations with both the Government and the public are of the best.
The concession granted to the company was dated 1885, but it was four years later when a public issue was made—namely, in October, 1889. The concession is for a period of eighty years, dating from April, 1894; at the expiration of the period the railway and all its accessories become the property of the Salvadorean Government. In the meantime, however, it is open to the Government to buy up the existing railway in 1940 if it so desires, at a price to be agreed upon or fixed by valuation. The railway company enjoys protection from competition, and has also preferentialprivileges (except as against the State) for constructing future extensions.
The road actually dates from the year 1882, when the first section, from the port of Acajutla to the town of Sonsonate, one of the most important in the Republic, and situated at about fifty miles' distance from the capital, was opened for traffic. The distance was 20 kilometres, or, say, 121⁄2miles, the next section to be finished being that from Sonsonate to Armenia, a further distance of 261⁄4kilometres, or 161⁄2miles, thus bringing up the constructed line to 461⁄4kilometres by the end of September, 1884.
From then onwards the rate of construction was as follows: From Armenia to Amate Marin, 61⁄2kilometres, or 4 miles, opened for traffic September, 1886; from Amate Marin to Ateos, 31⁄4kilometres, or 2 miles, January, 1887; from Ateos to La Ceiba, and which forms a branch ending at this town, a distance of 10 kilometres, or 61⁄4miles, March, 1890; from Ateos to La Joya, a distance of 22 kilometres, or 131⁄2miles, opened to traffic on September 15, 1895; and from La Joya to Santa Ana—a very important town of some 33,000 inhabitants—a distance of 29 kilometres, or 18 miles, opened in November, 1896.
From Santa Ana, which is another terminal point, the railway receives a valuable freight in the form of agricultural produce, such as coffee, sugar, tobacco, and various kinds of grain.
A continuation of the line was then made to the capital, San Salvador, the extension from Sitio-del-Niño to Nejapa, one of 18 kilometres, or, say, 11 miles, being opened for traffic in February, 1898; while the last section, between Nejapa and San Salvador, a distance of 20 kilometres, or 121⁄2miles, was completedby the month of March, 1900. The total distance of the track is, therefore, 155 kilometres, or 961⁄4miles, exclusive of sidings. There are some eighteen stations, including the terminals at Acajutla, Santa Ana, and San Salvador; while the buildings, both here and at Sonsonate, Sitio-del-Niño, and Quezaltepeque, are well built and efficient structures in every way.
The gauge of the track is 3 feet, and the maximum gradient one of 3·75 per cent. The minimum curve radius is 359 feet 3 inches. The interesting engineering features of the line are many, and these are found for the most part upon the Santa Ana section, between that town and Sitio-del-Niño. There are forty-one bridges, consisting of through-truss, plate-girder, and rolled "I" beams. These run from 20 to 14 feet span, the makers who have supplied them including German, Belgian, British, and American contractors. The principal bridges are as follows:
Span.Made by ——At Kilometre 78·700Deck-plate girder bridge56 ft.Aug. Lecoq, Hal, Belgium.At Kilometre 82·600Through-span girder bridge78 ft.Harkort, Duisberg, Germany.At Kilometre 98·500Through-span girder bridge70 ft.San Francisco Bridge Company.At Kilometre 188·700Through-deck girder bridge140 ft.Atliérs de Construction, A. Lecoq, Hal, Belgium.At Kilometre 191·700Through-deck girder bridge140 ft.Atliérs de Construction, A. Lecoq, Hal, Belgium.
There are a number of culverts, over sixty-six being of some importance, besides several of minor interest, of 3 feet and under. The road is exceedingly well ballasted from beginning to end, and is maintained in an altogether efficient manner of repair and orderliness.
mapSALVADOR RAILWAYTO ACCOMPANYSALVADOR OF THE TWENTIETH CENTURYBYPERCY F. MARTIN, F.R.G.S.
SALVADOR RAILWAYTO ACCOMPANYSALVADOR OF THE TWENTIETH CENTURYBYPERCY F. MARTIN, F.R.G.S.
SALVADOR RAILWAYTO ACCOMPANYSALVADOR OF THE TWENTIETH CENTURYBYPERCY F. MARTIN, F.R.G.S.
In regard to the rolling-stock, this is equally well equipped and maintained, the greatest care being taken by the management to see that every car that is sent out is in a thoroughly sound state of repair and cleanliness. There are in all eleven locomotives, of which the following details will be of interest:
Cylinder.Driving Wheels.Weight.No.Makers.Diameter.Stroke.Pairs.Inches.Tons.1Prescott, Scott and Co., San Francisco12 in.16 in.23817·502Baldwin Locomotive Works, Philadelphia15 in.20 in.43825·003" "15 in.20 in.43825·004" "15 in.20 in.43825·005Cooke, Patterson and Co., New Jersey16 in.20 in.43830·356Baldwin Locomotive Works, Philadelphia17 in.20 in.34236·747" "17 in.20 in.34236·748" "17 in.20 in.34236·749" "16 in.20 in.34232·4010" "16 in.20 in.34232·4011" "16 in.20 in.34232·40
In addition to the above, two other engines of precisely similar make have lately been delivered to the Company by the Baldwin Locomotive Works, Philadelphia, U.S.A. It is explained that the native engine-drivers are now accustomed to these engines, which are to be found in use upon almost the whole of the South and Central American railways.
The rolling-stock on the Salvador Railway is maintained in the same efficient order as are the stations and permanent way. It consists of some twenty-three passenger coaches as follows: Eight of first class, light but strong carriages, suitable for a tropical country and fitted with wide seats upholstered in rattan; onesecond class, only a trifle less expensively upholstered, but in no wise less airy or comfortable; and four brake and luggage vans. Of goods-waggons there are 161—namely, 1 workmen's car, 5 cattle cars, 95 covered-goods and 60 platform cars. These cars are mostly the manufacture of the Lancaster Carriage and Waggon Company, Ltd., of Lancaster, and the Allison Manufacturing Company, of Philadelphia, U.S.A. The company have recently erected some ten box waggons at the well-fitted railway shops at Sonsonate, where every appliance and the newest equipment of machinery are to be found. The passenger coaches are also partly of British and partly of American construction, the Lancaster Carriage and Waggon Company, Ltd., and the Harlan, Hollingsworth Company, of Philadelphia, being responsible for this part of the equipment.
In the month of April last a change took place in the general management of the Salvador Railway, when Mr. C. T. S. Spencer, the newly-appointed chief, proceeding to his post via Mexico City and Salina Cruz. Mr. Spencer served his pupilage with the London and South-Western Railway, mainly on the North Devon and Cornish branches. When out of his articles, he accepted an appointment as District Engineer on the Abbotsbury Railway, near Dorset, which line is now a part of the Great Western Railway system. In 1886 Mr. Spencer went out to Rio Grande do Sul (Brazil), as District Engineer on the Brazil Great Southern Railway, and subsequently rose to the position of Chief Constructing Engineer. On this line he built the Ibicúy Bridge, which still ranks as the largest bridge in Brazil, being over a mile long, with some 70-metre spans resting on cylinders sunk by the pneumatic process, which at that time was in its infancy.When the line was completed, Mr. Spencer surveyed an extension running into some hundreds of kilometres, and passing through the beautiful district of Missiones.
Mr. Spencer, still a young man, then went to Salvador, and in 1889 he surveyed the La Unión-San Miguel line. This railway was partly constructed by the Government, and its completion to San Miguel is now being pushed forward. In 1892 Mr. Spencer went to Colombia as General Manager of the Antioquia Railway, which commission he held until the Government attempted to cancel the concession without paying any indemnity to the company. He afterwards went to Angola, and drew up the plans for a large railway scheme from the coast inwards; a part of this line has since been built.
Upon returning to London, Mr. Spencer accepted the post of Consulting Engineer to a railway-constructing syndicate in the City, and a few years ago he was elected to a seat on the Board of the Salvador Railway. Mr. Spencer visited the Republic in 1908, and on his return pointed out to the Chairman that, owing to the opening of the Tehuantepec Railway, a special steamer service connecting up Acajutla with Salina Cruz would probably prove a paying concern. Mr. Mark J. Kelly, the able and experienced Chairman of this railway, with his customary quickness of perception, combined with his own not inconsiderable experience of the Republic of Salvador, of which for fifteen years he had acted as Consul-General in England, at once fell in with the idea, and the steamshipSalvadorwas the result.
Mr. Spencer is an Associate Member of the Institute of Civil Engineers, and a Fellow of the Royal Geographical Society. While it is a subject of regret thatMr. Charles Stewart, late Manager of the Salvador Railway, was compelled to abandon his post owing to ill-health, the shareholders of the railway may be unreservedly congratulated upon obtaining the services of so able and experienced an engineer as Mr. Spencer.
Mr. John White Hinds, Chief Engineer of the Salvador Railway Company, started in his profession at the age of fifteen, and was for over a year in the shops of the Great Western Railway at Swindon. He then remained for four years as a pupil with Mr. W. H. Lancashire, C.E., of Sheffield. Three years were passed in London studying, when Mr. Hinds went to America, and entered the shops of the Chicago and North-Western Railroad. He has also seen service in Chile, Peru, Guatemala and Salvador. In this latter Republic, Mr. Hinds has acted as chief of the party of engineers on final surveys of the Santa Ana branch of the Salvador Railway, while he also went to La Unión, the largest of the Salvadorean ports, to construct the railway from La Unión to San Miguel for the Salvador Government. The line was only constructed to the extent of ten miles or so, when a revolution broke out and the work was abandoned. Since then—namely, in 1894—Mr. Hinds has been engaged upon the Guatemala Northern Railway as Surveyor, and helped in the construction of that portion of the line to the City. Mr. Hinds likewise completed surveys to the town of Zacapa, on the same railway, and assisted in the construction work between Puerto Barrios and Zacapa. Latterly Mr. Hinds has been exclusively engaged upon the Salvador Railway, of which he has been the Resident Engineer since 1903, and Permanent Way Engineer since 1906.
One of the contractors who were connected with therailway in the early days was Mr. Albert J. Scherzer, and it is interesting to note that his nephew, Mr. George Scherzer Walsh, a young and clever railway engineer, was also connected with the company. Mr. Walsh accompanied Mr. M. J. Kelly and Mr. George Todd Symons (the senior partner of G. T. Symons and Co., of 4, Lloyd's Avenue, E.C.) to Salvador in the spring of 1910, upon matters relating to the extension of the company's track and the appointment of agents for the steamship service. Mr. Walsh did some good and useful work as technical adviser on the ground, but, unfortunately, in the end his services proved unfruitful, owing to the selfish and senseless opposition offered to the company's contemplated extensions upon the part of the American Syndicate, who hold a railway concession from the Salvadorean Government to build new lines within this zone. At the time that the American group protested—and protested, as it seems, successfully—against any further construction work being undertaken by the Salvador Railway Company, they had done absolutely nothing themselves, and had not even presented the preliminary plans to the Government. As will be seen, however, they have at last made an attempt to commence work of some kind; but my latest advices point to the fact that successful completion is still far from being even within sight.
The property owned by the Salvador Railway Company, as has been shown above, is an extensive and increasingly valuable one. It embraces something like 100 miles of track, with its own telegraph and telephone services; a long and well-built iron pier, located at the Port of Acajutla, and which cost no less than $1,000,000 to erect; as well as warehouses anda fleet of tugs and barges for the prompt and efficient handling of the cargo.
Upon all sides one hears the services rendered by this company spoken of in a manner altogether flattering to the management; and it may be said in truth that in no other Republic of South or Central America can one come across a wider consensus of opinion favourable to a foreign-managed railway undertaking than in the case of the Salvador Railway.
To the not inconsiderable assets above mentioned, the railway has added a fleet of steamships to carry cargo between Acajutla, its own port terminal, and Salina Cruz (Mexico), the Pacific terminus of the Tehuantepec Interoceanic Railway. It is worthy of note that both of these railways are managed by British corporations, a matter of no small importance in view of the strenuous efforts of North American interests to secure complete control over the transport arrangements in this part of the world.
The Salvador Railway's first steamer, theSalvador, is a neat, trim, and well-built vessel of some 1,200 tons, out of the yards of Messrs. Swan and Hunter, of Newcastle-on-Tyne. It is fully equipped with all the latest appliances for the quick and efficient handling of cargo, while its passenger accommodation is of a commodious and comfortable character. This handsome vessel has for some time been firmly established as a favourite with the importers and exporters of the Republic of Salvador, who now, for the first time in their experience, are enjoying the advantages of rapid and reliable communication with Europe and the United States of America, with punctuality in regard to dates of arrival and departure each week. As a matter of fact, this service now effects in about twoweeks, what could not be previously done in less than one month. The appreciation by the public of these advantages is sufficiently displayed in the circumstance that theS.S.Salvadorcarries something like three-fourths of the imports and exports of the country, to the great disappointment, and even dismay, of the older lines. Other similar vessels are being built for the Company by Messrs. Swan and Hunter.
The company has in view the rendering the same services to the other Salvadorean ports as that now offered to Acajutla and the Mexican port of Salina Cruz. An important local trade between Mexico and Salvador, to the mutual advantages of both, is now being built up, thanks to the initiative of the Salvador Railway Company in establishing this steamship service.
How successful the company's fleet has proved is best seen from some observations which were made by the Chairman at the last annual meeting of the proprietors, December 13, 1910, and in which he stated,inter alia:
"It is a matter of great satisfaction to me and to my co-directors to be able to assure you that we have not only emerged, in respect to this service, out of the experimental stage, but we have actually become a fairly settled institution as a steamship line on that coast. Instead of one boat, with which last year we gave such a service to Salvador by the port of Acajutla as they had never had before, carried out with a regularity and strict adherence to schedule to which they were utterly unaccustomed, your company is represented to-day by three steamers, and is making the service from Salina Cruz clear down to Nicaragua, embracing all the ports of Guatemala, Salvador, Amapala, the only Honduranean port on the Pacific, and Corinto. In barely a year we have found ample reason for increasing our service to three vessels, twoof which are chartered boats, while we may be able to put in hand the building of a second boat of the same type as our first. This satisfactory result has only been attained by untiring effort; but we have reason to believe that your steamship service has arrived to stay, and that it will be represented by a substantial figure in the earnings in the future. The service has won deserved popularity by reason of its being carried out, as I have told you, with adherence to a schedule, and we now frequently receive in London applications from Central Americans travelling about Europe with their families to reserve cabins for them on our steamerSalvador. Mails are now sent by this service of ours in connection with the Isthmus of Tehuantepec, and reach Europe in about sixteen days instead of a month; while the planters get their produce to European markets in little over thirty days, against forty to fifty by way of Panamá, and over one hundred by way of the Straits of Magellan. The passenger traffic on theSalvador, which we were all disposed to regard as something that might take a considerable time to develop, has already given results which you will understand better when I tell you that generally the accommodation provided for passengers on theSalvadoris fully taken up. During my stay in Salvador I took advantage of the appreciation thus shown by the public of our steamship venture to arrange with the Government a contract for a subsidy, and we are now receiving £100 per month in gold on this head. I had the honour of being received by His Excellency President Diaz on several occasions during my stay in Mexico, both going out and returning home, and he promised favourable consideration by his Government of an application, which we have since formally put in, for a subsidy from that Republic, which is benefiting as much as Salvador from the development of your steamship service."
"It is a matter of great satisfaction to me and to my co-directors to be able to assure you that we have not only emerged, in respect to this service, out of the experimental stage, but we have actually become a fairly settled institution as a steamship line on that coast. Instead of one boat, with which last year we gave such a service to Salvador by the port of Acajutla as they had never had before, carried out with a regularity and strict adherence to schedule to which they were utterly unaccustomed, your company is represented to-day by three steamers, and is making the service from Salina Cruz clear down to Nicaragua, embracing all the ports of Guatemala, Salvador, Amapala, the only Honduranean port on the Pacific, and Corinto. In barely a year we have found ample reason for increasing our service to three vessels, twoof which are chartered boats, while we may be able to put in hand the building of a second boat of the same type as our first. This satisfactory result has only been attained by untiring effort; but we have reason to believe that your steamship service has arrived to stay, and that it will be represented by a substantial figure in the earnings in the future. The service has won deserved popularity by reason of its being carried out, as I have told you, with adherence to a schedule, and we now frequently receive in London applications from Central Americans travelling about Europe with their families to reserve cabins for them on our steamerSalvador. Mails are now sent by this service of ours in connection with the Isthmus of Tehuantepec, and reach Europe in about sixteen days instead of a month; while the planters get their produce to European markets in little over thirty days, against forty to fifty by way of Panamá, and over one hundred by way of the Straits of Magellan. The passenger traffic on theSalvador, which we were all disposed to regard as something that might take a considerable time to develop, has already given results which you will understand better when I tell you that generally the accommodation provided for passengers on theSalvadoris fully taken up. During my stay in Salvador I took advantage of the appreciation thus shown by the public of our steamship venture to arrange with the Government a contract for a subsidy, and we are now receiving £100 per month in gold on this head. I had the honour of being received by His Excellency President Diaz on several occasions during my stay in Mexico, both going out and returning home, and he promised favourable consideration by his Government of an application, which we have since formally put in, for a subsidy from that Republic, which is benefiting as much as Salvador from the development of your steamship service."
deck bridgeDeck Bridge on Salvador Railway.
Deck Bridge on Salvador Railway.
Deck Bridge on Salvador Railway.
StationStation Building at Santa Ana on the Salvador Railway.
Station Building at Santa Ana on the Salvador Railway.
Station Building at Santa Ana on the Salvador Railway.
With such prospects the Salvador Railway seems destined to enjoy a time of great prosperity; and, indeed, the outlook would be practically undimmed but for the ever-threatening question of the exchange.The high rate of sterling exchange constitutes a very real and visible "fly in the ointment." Salvador, it may be pointed out, has the advantages of a metallic currency, with no fiscal paper money of any sort; but, unfortunately, it is a silver currency, which is aggravated by the circumstance that the export of silver, if not actually prohibited by legislation, is at all events very difficult to bring about, inasmuch as official permission is required, and is as often refused.
On the other hand, the banks are overstocked with silver, and are willing to lend sums at what may, for these parts of the world, be considered very low rates of interest—namely, 5 per cent. per annum—which enables people, who would otherwise be compelled to sell drafts against their exported produce, to hold them back, and, by a simple understanding among themselves, keep the rates as near to 200 per cent. premium as may suit their own interests.
The Salvador Railway Company, which has a silver tariff pure and simple, has to buy sterling drafts, whatever the rate may be, in order to meet debenture interest payments, the cost and freight upon all imported materials for its various services, insurance upon its properties, its London expenses—including directors' remuneration—and towards this large expenditure the only sterling contribution of the country is the Governmental subsidy of £24,000 per annum, which payment will terminate automatically in 1916.
In sending out their Chairman, Mr. Mark J. Kelly, therefore, in 1910, to endeavour to reduce the company's burden in this respect, the Board of Directors undoubtedly made a wise move, inasmuch as no one could possibly be better placed, by reason of his great popularity and exceptional experience, than Mr. Kellyto conduct such delicate and intricate negotiations. In spite of such influence and personal weight, however, I am much afraid that the time is hardly yet when any serious modification of the terms of the company's concession—such as the granting of a tariff payable in gold—may be looked for.
At a time when gold is in the neighbourhood of 200 per cent. premium (i.e., 1 silver dollar equals 33 cents gold) this would mean an increase in the tariff rates, and the Government can hardly be expected to authorize that increase in the present circumstances. As a matter of fact, the company's tariff is much below that of any railway undertaking in the whole of Latin-America, of which I, at least, have any cognizance. But the public are hardly likely on that account to be any more disposed to fall in with an increase in the railway's rates.
The outlook for the Salvador Railway generally is, as observed, a hopeful one. It is admitted by all who are acquainted with its operations that its advent and completion have materially aided the development of the Republic's resources, and day by day the expansion of its industries is becoming more apparent. The local traffics, showing as they do gradual but consistent development, are the outcome of the safe but conservative policy of the management, whose relations, as I have already observed, with the railway'sclientèleare of the most friendly character. If the agricultural development of the portions of the country served by the railway have been somewhat slow, the movements have, at least, been consistent; and there can be little doubt that an intelligent expansion of the Republic's magnificent possibilities is merely a question of time. No permanent improvement must be expected, however,to assert itself until the difficulties of exchange have been overcome. While poor trade may have somewhat affected the returns of the last two years, the rate of exchange has been responsible for the greater part of the financial disappointment. Possibly the poor trade is the cause of the exchange being so high, as much as the exchange being the cause of the poverty of trade. So far as the railway is concerned, the effect is certainly twofold—directly, by reason of the loss upon remittances to the head-office in London; and indirectly, on account of the prejudicial influence upon trade.
There is a very general and perfectly comprehensible complaint that, in spite of the better crops which have been garnered this and last year, and the abundance of silver currency, actual sales of merchantable goods have been less, on account of the high rate of exchange compelling the sellers to continually mark-up their wares. One result of this is that the merchants have ordered fewer goods, and the railway has carried less freight.
Unfortunately, in Salvador—as in other parts of the world, our own not excepted—there are several divergent opinions upon this question of economics, and here one comes across as many individuals who are in favour of a high exchange as those who decry it. The planters, for instance, hold that the high exchanges constitute a clear and legitimate bonus upon the value of the coffee, the indigo, the balsam, and the other articles of export; while the importers clamour loudly, and perhaps with some more reason on their side, that the high exchanges, if, indeed, they are really of any benefit at all to the planters, form no less a tax, and a very heavy one at that, upon the goods consumedby the general public. Still worse, however, they act as a deterrent to active trade and commerce, since all goods sold must be marked-up at higher prices than are customary, with the very natural result of a smaller consumption. Thus, the public are disappointed, the merchants are grumbling, the revenue of the country in its Customs-houses suffers, and the railway and its shareholders are left lamenting—all because the planters must be humoured.
This contention might also contain a little more force were wages to advance in the sameratioas the rate of exchange. But this is far from being the case, for no advance in wages has followed upon the increased premium upon drafts on London; while bankers of Salvador, on the other hand, declare that they derive no profits on balance from their exchange account. More often than not, so they say, they suffer a loss, since the fluctuations in the rates are so eccentric and so difficult to control that they are particularly favoured when they succeed in covering the cheques or short-dated drafts, which they issue on Europe by purchases of ninety days' drafts from the planters, without actually incurring a loss.
The rate of exchange in Salvador to-day is a very high one—nothing like that of Colombia, it is true, but at time of writing gold is at 160 per cent. premium. Here, however, it must be remembered there is no official currency of paper whatever, the banks which issue notes being subject to rigorous inspection and compelled to maintain silver coin to an extent which reduces their issues of notes to a mere matter of public convenience, rather than a source of profit to the banks themselves. All this is of great moment to the welfare and the future of the Salvador Railway, and has more than once been explained at length by the capableand experienced Chairman, Mr. Mark J. Kelly, at the meetings of the shareholders held in London.
The financial condition of the Salvador Railway is to-day a steadily improving one. We see that for the last year (1909-10) the gross receipts were better by £6,921; while the ratio of expenses was also satisfactory, namely, 51·81 as against 54·68, a decrease of 2·87 per cent. Improved good-traffics were also met with, and worked out at 1s. 1d. a ton in excess of previous figures. After providing interest and redemption upon both classes of Debentures, and interest at 5 per cent. per annum upon the Terminable Notes, the amount available for distribution amounted to £8,565 13s. 9d., out of which was made a payment of 3 per cent. upon the Preference shares for the year, leaving a balance of £1,065 13s. 9d., carried forward to the credit of Net Revenue Account. Prior Lien Debentures amounting to £3,600, and Mortgage Debentures to another £9,000, have also been redeemed this year, making the total redemption £62,200 to date of the accounts.
In June of next year (1912) the Terminable Notes, amounting to £45,000, will be either paid off or converted into Debentures probably bearing 5 per cent. interest. The exact financial position of the company stands as follows: