#FromtheArchives - Guano trade
A letter in the Baring Archive provides an insight into the trade of what we might regard as an unusual commodity - bird poo. Guano is the accumulated excrement of seabirds and is a highly effective organic fertiliser. On 3 May 1848 Alsop & Co, a firm based in Lima, wrote to Barings providing detailed information on the guano trade.
The first part of the letter relates toa lucrative new contract that had been negotiated between the Peruvian Government and an international consortium: "Such a contract as the above seems incredible; the emoluments being in every way so much beyond the risk incurred." The author continues, "The position of the Peru[vian] Government at the time the contract was made, was nevertheless peculiar; the money was needed to pay the arrears of several months due on the civil list; every one depending on their pay, members of Congress included, was clamorous; and no time being allowed for foreign competition and no other parties here prepared to act, the former contractors had the government at their mercy and they dictated their own terms! Except however at a moment of actual war or revolution it is not likely that such a state of things will occur again."
The letter writer goes on to provide information that could be useful for the negotiation of future contracts. They comment on the supply: "The supply of Peruvian Guano at the Chincha Islands alone from where only the exportation is permitted, is inexhaustible for the present century at least." They also provide information on access: "There are no private deposits of Guano, or deposits belonging to individuals. It is all national property."
The letter writer provides some historical background noting that "Guano has been used in Peru since the time of the Incas. It was first sent to England experimentally in 1826 and from that time it continued to go still experimentally and not as an article of commerce until 1839." The writer also describes how the Peruvian Government had almost missed out on this lucrative commodity by selling the rights to the Chincha Islands to a local merchant but that the "sale was subsequently rescinded by the government under the provisions of an old Spanish law which gives that power to any seller who discovers within two years after a sale, that, through ignorance or error, has sold his property for less than half its value!" The author does not go into detail on how the guano is mined but it is known that it was initially mined by enslaved African labourers and then by poorly paid workers from the Pacific Islands and South China working in terrible conditions.
Barings do not seem to have become very involved in the guano contracts but in 1922 they issued a GBP 1.25 million 7.5% fixed rate issue for the Peruvian Government secured on guano. This was well after the boom time for guano. From 1840 to 1870 Peru had exported 12 million tons of guano bringing stability and prosperity to Peru and supporting intensive farming in Britain, mainland Europe and the United States. By 1870 the guano resources that had built up on the islands over millennia had become severely depleted. Other natural sources of nitrate replaced guano and it was eventually replaced by synthetic fertilizer.
- Read the full letter from Alsop & Co (click on View Gallery to browse through the pages)
- View the 1922 Peruvian bonds
- View the prospectus for the 1922 issue
Posted on Tuesday, 26th April 2022