Historic association and romantic interest combine to lend a peculiar charm to the old Spanish edifices of colonial times that are still to be seen in the various cities of South America. Though many of them are in ruins, and others have been completely modernized to serve as new public buildings or residences, there are still a few that preserve the appearance they had when erected centuries ago “by order of His Excellency the Viceroy.” Of these generally unclassified architectural monuments, none possesses a greater claim to interest than the famous mint of Potosí, the Casa Real de Moneda. Its history dates from the most flourishing period of Spanish possession in the New World, and is intimately connected with the accounts of fabulous wealth and the records of terrible cruelty written in the annals of the seamed and weather beaten Cerro de Potosí.

The first money coined in the Spanish-American colonies was made in Mexico in the sixteenth century, when the first viceroy, Don Antonio de Mendoza, who was afterward second Viceroy of Peru, issued the decree to establish a mint. The coins were cut with scissors out of hammered silver and were marked with a cross, which was the only seal they bore. Some years later, the illustrious Viceroy Toledo, during a visit to Potosí in 1572, ordered the construction of the Royal Mint of Potosí. It occupied the site of the present palace of justice, the old chimney of the foundry still remaining to mark the spot where, more than three hundred years ago, silver from the famous Cerro was coined into reales, of about the value of a dime. By a law passed soon after the establishment of the mint, miners were obliged to leave here a fourth part of their bullion, which had been assayed and smelted in the royal foundries after the payment of the “fifth” and other fiscal taxes, and this was reduced to reales and returned to the owner in that form. In the seventeenth century the annual coinage reached the sum of one million pesos, of eight reales, and counterfeiting began to be practised on such a large scale that it was brought to the attention of King Philip IV., who ordered a rigorous investigation and decreed the death penalty against offenders. Several Spanish nobles were executed, including the chief assayer of the mint, and a command was given that all money held by private individuals as well as public officials should be presented for examination. Within five days the amount exhibited was thirty-six million pesos! Shortly after this episode a royal decree was issued for the coinage of money bearing the stamp of two columns, instead of a cross, but it was not until 1728 that a royal ordinance established the circular form of the money, its standard, and other important conditions necessary to a satisfactory basis of coinage.

The present Casa de Moneda was founded in 1753, and required twenty years for building, the cost amounting to nearly two million pesos. As materials were cheap and laborers were paid practically nothing under the mita system, this cost seemed incredible to the Spanish king, Charles III., who, when informed of the expense, exclaimed: “The building must be made of silver!” But the beams of tipa wood and crossbeams of cedar, which are as solid to-day as when put in place one hundred and fifty years ago, had to be brought from a great distance and with enormous difficulty. According to the chronicles of the period, there were single pieces of wood which cost two thousand pesos each for transportation. Roads were opened and levelled through the wild regions of eastern Charcas expressly for the purpose of providing a route to Potosí from the hardwood forests of Tomina and Orán, the latter being situated more than two hundred leagues distant, in the present territory of Argentina. Thousands of Indians were employed in the colossal task of constructing this large edifice, which is a marvel of solidity and endurance. It occupies a central locality in the city of Potosí, on the Plaza del Gato, and covers two squares. Built of solid stone and brick masonry, its dome and floors supported by beams of imperishable hardwood, it is as strong as a fortress, for which purpose it has been used many times in the history of the republic. The fiery orator Casimiro Olañeta called it, upon one occasion, “the Bastille of Bolivia,” a title which has clung to it with the persistence that is usually noted in the popular adoption of comparisons suggestive of classical associations. The first money coined in the new mint bore the bust of King Charles III. and the royal arms of Castile. The machinery used in this coinage is still to be seen in the museum of the mint, and is a curious collection of old wooden wheels, spikes, and beams. The machinery for pressing the sheets of silver to the required thinness before cutting out the coins is located on the second floor, and was formerly connected, on the floor below, with a treadmill which used to be worked by mules and Indians. The whole apparatus is of the clumsiest and most primitive description.

The mint of Potosí, as it is operated under the present government, is provided with modern machinery, the first purchase having been made during the administration of President Melgarejo in 1868, at a cost, it is stated, of three hundred thousand bolivianos. New machinery was bought in 1900, and an order was given still more recently for the purchase of apparatus necessary for the elaboration of the sulphides of silver and of the ashes and sand that result from the treatment of silver metal. All the machinery now in use in the mint was bought in the United States. Since 1857 no gold has been coined, and by a law passed in 1905 the English pound sterling is recognized as a standard of exchange for the value of twelve bolivianos and fifty centavos; but with the modern machinery, recently purchased, the government is prepared to renew the coinage of gold whenever it may be deemed advisable. Silver coins of fifty centavos and twenty centavos are the only moneys issued by the mint at present, though this is a temporary arrangement. During the year 1904 the coinage was eight hundred and sixteen thousand nine hundred and thirty-seven bolivianos. The total coinage of the mint, from its foundation to the present time, is one billion eight hundred million pesos, silver, and about five million pesos, gold.

Outside of the section where the foundry is at work and where the machinery is whirring in the busy process of turning silver bars into half-dollars, or medio bolivianos, the Casa de Moneda suggests the events of a century ago rather than of modern activity and enterprise. The handsomely carved doorway is the work of artists of the eighteenth century, and the patios, of which there are several, are reminders of incidents that happened more than a hundred years ago. In the inner patio, an old sun-dial marks the site of the execution of Alonso Ibañez, one of the first patriots to die for the cause of liberty in the New World. Passages lead from this court to hidden recesses in the old building, some of them in a subterranean labyrinth of turns and windings that are hopelessly puzzling to the uninitiated. One cannot help speculating as to the possible uses to which these dungeon-like alleys may have been put in the urgent emergencies of revolutionary times, and a covered cistern built in the thick wall between two suspicious-looking cells suggests all kinds of weird and tragic scenes. The watchman of the mint says that the old building is known to very few, and that he himself finds passages which are new to him every time he makes a careful exploration. In the first patio a modern ornament, the work of an artist of fifty years ago, occupies a conspicuous position over the central arch. It is a huge, grotesque head, painted in vivid colors, and is said to have been placed there as a caricature in disrespect for one of the most radical of Bolivia’s presidents. It is the first object that is seen upon entering the main patio from the street, and is a conspicuously striking adornment. In the unused part of the mint, on the second floor, where the old machinery is preserved as a curiosity and a valued relic, the rooms remain much the same as they were when the noble officers of the Spanish king held sway as directors of the institution. There is something fascinating in the glimpses which the now deserted rooms afford of the character of those times, when this great establishment, which was maintained at the price of untold abuses and infinite intrigue, bore on every door some devout eulogy or prayer. O dulce Virgo Maria! is the pious sentiment still to be read over the entrance to the old stamping room, and O clemens, ó pia! marks the doorway through which the unfortunate Indians passed to work out their mita on the treadmill or at the furnace. Not less interesting is the library, in which are preserved specimens of the coins and medals that have been issued by the Casa de Moneda since its foundation. Around the walls hang old paintings which were presented to the mint by King Charles IV., said to be the work of famous painters of the Spanish court. Old parchments contain historical records of value, and there are a few relics of the earliest days of the first mint, though it is to be regretted that greater care has not been taken to preserve these priceless treasures.

According to law, the boliviano is the standard of the national coinage. It weighs twenty-five grammes, contains three hundred and forty-seven and one-half grains of pure silver, and is worth one hundred centavos. But at present the silver money in circulation is represented only in pieces of fifty, twenty, ten, and five centavos, of a standard and weight in proportion to that of the boliviano. When at par, the boliviano is worth five francs. It is now worth about two francs. Exportation of silver money is free, but its importation is prohibited. No money is recognized as legal except that which is legitimately emitted by the state, in conformity with the existing laws. Banknotes, popularly called billetes, represent the equivalent of one, five, ten, twenty, fifty, and one hundred bolivianos. It is not unusual in La Paz and elsewhere to see a billete divided into halves to make change, though the halves are not accepted by the banks, and serve only as a convenience in the use of small change. The amount of banknotes in circulation is estimated at a little over ten million bolivianos.

In order to increase confidence abroad and to promote economic advancement at home, the government of Bolivia is giving special attention to perfecting the monetary laws of the country. One of the most eminent authorities on Bolivian finance, Señor P. Beer, director of the German-Chilean bank, in La Paz and Oruro, who very kindly furnished the information which is here given on this subject, speaks in the highest terms of the favorable financial outlook for Bolivia. The recognition of the English pound sterling as a standard of exchange, equivalent to twelve bolivianos and fifty centavos is an important step, as formerly the variations in the price of silver caused considerable fluctuation in the value of the boliviano. It is obligatory to pay half of all duties in gold, or, if paid in silver, an increase of five per cent is charged to cover the cost of the importation of gold. Fluctuations in exchange have greatly diminished under the new law, having been reduced from three pence to one penny and a quarter within the year. Under the present rule, the minimum value of the boliviano is nineteen pence, the maximum twenty and one-fourth pence. This is regarded as the first step toward the introduction of the gold standard. The government is also considering various projects for improving the banking laws. The emission of the banks will be reduced and unified. When the Acre campaign exacted extraordinary expenditure on the part of the government, the necessary funds were secured by loans on the banks of the country. The National Bank of Bolivia, the Argandoña Bank, and the Industrial Bank of La Paz had the right to issue notes, or billetes, for the sum of their paid-up capital, on the condition that thirty per cent of the notes in circulation were covered by coin stored in their vaults. By a special law, these banks were authorized to increase their emission to one hundred and fifty per cent of their paid-up capital, and by this means they were able to provide the government with the funds necessary for the Acre campaign. In this way an internal debt was incurred, which at present amounts to a little more than one hundred and fifty thousand pounds sterling, covered by state bonds that are guaranteed by the income from the customs duties of La Paz, about eighty thousand pounds sterling annually. These bonds are amortised at six per cent, and the annual interest on them is ten per cent, this arrangement being carried out regularly twice a year, so that the debt may be considered as practically cancelled. Another internal debt, consequent upon the Acre campaign, consists of the pension roll, military salaries, indemnities, etc., and is met by bonds of the Compensacion Militar, of which twenty thousand pounds sterling are in circulation. Ten per cent is amortised and the bonds earn ten per cent interest annually. The part amortised is replaced by new bonds. Congress is at present occupied with an old internal debt, amounting to about three hundred thousand pounds sterling, which has not been entirely recognized, but which will be paid as far as justifiable, with the approbation of Congress. The municipal debts are confined entirely to private loans. La Paz is contracting a loan of forty thousand pounds sterling, with which to build new hospitals and to perfect the canalization of the city.

Not only has Bolivia adopted methods for the improvement of the national finances, but by treaties with the neighboring republics, the government has recovered sovereignty over the import duties on products and manufactures from the republics of Chile and Peru. Both these republics formerly had the right to introduce their products and manufactures free of duties, by virtue of temporary treaties. Under the new treaties, Chile and Peru enjoy only the rights of favored nations in bringing in their merchandise. It is estimated that the increase in import duties arising from this arrangement will yield Bolivia at least eighty thousand pounds sterling annually. Under such auspicious circumstances the government is inaugurating a new era in commercial development. There are several reasons why the statistics of international trade give Bolivia a comparatively unimportant place among commercial nations. When the foreign trade of Bolivia passed through the ports of Peru, Chile, Argentina, and Brazil, without a clearly defined law regarding the port privileges, the Bolivian exports were largely credited to these countries, a condition of affairs which can be corrected under the present system of customs regulations. Limited facilities for transportation have been responsible, in a great degree, for the lack of commercial enterprise which has hitherto retarded the progress of the country, but this drawback has also been overcome. Bolivia is no longer isolated from the rest of the world because of the great wall of the Andes which looms up on one side and the thousands of miles that stretch between it and the seacoast on the other, since the problem of rapid transportation has been solved by the inauguration of a complete system of railways. The importance of railway facilities in promoting commerce is shown by the history of the Antofagasta and Oruro Railway and the Guaqui and La Paz Railway. As previously stated, since the construction of the former line the shipments through the port of Antofagasta have increased seventy per cent, and after the line from La Paz had been in operation a year the statements of shipping showed an increase of fifty per cent over previous years.

Liberal conditions govern the international relations of Bolivia, the protective policy being moderate in the commercial system of this country. Foreign merchandise, whether from Europe, North America, or elsewhere, finds easy access to the markets here, and, in compensation for the difficulties of transportation, advantageous terms are made in the regulation of customs duties on goods of foreign manufacture. Bolivia imports, chiefly, all kinds of machinery, hardware, furniture, cotton and woollen goods, clothing, wines, spirits, canned goods, and provisions. Every article imported must pass through one of the Aduanas, or custom houses, of the republic, to be examined and subjected to the customs charges, unless exempt by special laws, such as govern the privileges of diplomatic representatives, who pay no customs duties. The scale of duties on goods imported is fixed every eighteen months, and rules from the date named by the national Congress. The annual imports amount to one million five hundred thousand pounds sterling in value, and the exports to two million five hundred thousand pounds sterling, according to the latest statistics. Peru takes first place in supplying the Bolivian market, with nearly one-fifth of all imported goods. Germany follows with eighteen per cent, England with seventeen per cent, and the United States with sixteen per cent. The chief exports are silver, tin, copper, bismuth, rubber, quinine, coca, and hardwoods. The mining industry provides about eighty-five per cent of Bolivian exports, and rubber constitutes the remainder, except about three per cent, which is represented in quinine, coca, and miscellaneous products.

The principal shipping headquarters, in which are located the Aduanas, or custom houses of the republic, are: La Paz, Oruro, Uyuni, Tupiza, Tarija, Puerto Suarez, Villa Bella, Abuná, and the new Aduanilla, or minor custom house, of Iténez, at the confluence of the Rio Verde and the Guaporé, on the southeastern border of the Beni. The custom house of Guaqui, the chief Bolivian port on Lake Titicaca, has been removed to La Paz. The commerce through the custom house of La Paz last year amounted to nearly a million pounds sterling, and import and export taxes were collected in the sum of one hundred thousand pounds sterling, representing the most important share of the trade of the republic. The customhouse agencies of Port Pérez, Huaicho, Pelechuco, Desaguadero, and Copacabana are dependencies of the La Paz custom house. The Oruro Aduana is for the inspection of the commercial movement that passes through the Agencia Aduanera of Antofagasta. Last year’s report of the minister of finance shows the revenue from import and export taxes at Oruro to be about thirty thousand pounds sterling. Under the new treaty with Chile it is made possible to secure more accurate figures regarding the exports through Antofagasta, which are despatched from the Aduanas of Oruro, Uyuni, and Tupiza, as well as from the tax-collecting offices of Potosí and Chayanta. Oruro is the great exporting centre for silver and tin, which are produced in large quantities in this region. In addition to the Agencia Aduanera, or custom house agency, in Antofagasta, Bolivia has similar offices in the ports of Mollendo and Arica. The custom house of Uyuni, which, like that of Oruro, is one of revision, collects a storage tax that constitutes one of its important sources of revenue. Its record of commerce last year showed a notable increase over that of the year previous, amounting to eighteen thousand pounds sterling. The Aduana of Tupiza, near the Argentine border, secures its revenue chiefly through the exportation of national products and by tolls, the import duties amounting to about one thousand pounds sterling annually. Connected with this Aduana are the small stations, or resguardos, of Sococha, Talina, Estarca, San Pablo, Chaguana, Esmoraca, and Mojo, for the protection of trade on the Argentine frontier. A great deal of the commerce with Argentina, and, through its port of Rosario, with other foreign countries, passes through the custom house of Tarija and those of its dependencies, Salitre, Pulario, Padcaya, and Camacho, its total commerce for 1905 amounting to about thirty-five thousand pounds sterling.

The commerce of northern Bolivia which passes through Brazil is conducted chiefly by means of Aduanas and Aduanillas in the river ports of the upper Amazon. The chief of these is Villa Bella, at the confluence of the Beni and the Mamoré on the great Madeira River. It was established in 1880 as an Aduanilla and raised to the more important rank in 1886. The distance from this port to Pará, at the mouth of the Amazon River, is two thousand three hundred and seventy-three miles. Most of the commerce of the Beni and the Territorio de Colonias passes through Villa Bella, though since the recent boundary settlement with Brazil, the frontier port of Abuná, at the junction of the Abuná and Madeira Rivers further north, has been increasing in importance as a shipping port for this region.

Eastern Bolivia has, in Puerto Suarez, a shipping place for merchandise destined for the Paraguay River ports and La Plata. It is a thriving town, situated on the western bank of the Paraguay, in the department of Santa Cruz, opposite the Brazilian port of Corumbá. The dependencies of the custom house of Puerto Suarez are La Gaiba, Marco, and San Ignacio, also on the Paraguay River. Ocean steamers ascend the river Paraguay as far as Puerto Suarez, and a regular line, that of the Lloyd-Brazileiro of Rio de Janeiro, Brazil, has a weekly service to Corumbá, which is one of the principal Brazilian ports on the Paraguay River. With the completion of the new system of Bolivian railways, Puerto Suarez will become one of the most important commercial centres of the republic, as it is to be connected by rail with Santa Cruz and the Beni, a region rich in natural products. There is now a well-beaten road from Puerto Suarez to Santa Cruz, and surveys have been made for the proposed railway. The commerce which passes through Puerto Suarez is chiefly that of Santa Cruz and the Beni, and amounts to one hundred and twenty-five thousand pounds sterling annually, of which two-thirds is represented by the export of rubber.

The commerce of Bolivia is conducted chiefly through large importing and exporting houses in the various cities, and the financial operations connected with it are carried on by means of banking institutions in these cities. In the smaller and more remote commercial centres the business houses are also banking agencies. The financial standing of these important establishments furnishes the chief index to the commercial prosperity of any section of the country. The oldest bank of the republic now in existence under its original charter is the Credito Hipotecario de Bolivia, which was established in La Paz in 1870. Its authorized capital is ten million bolivianos, subscribed capital two million bolivianos, and paid-up capital six hundred thousand bolivianos. The president, Señor Don Fermin Cusicanqui is also president of the Banco Industrial of La Paz, and is greatly esteemed as one of the leading financiers of Bolivia. The vice-president, Señor Don José Gutiérrez Guerra, to whose courtesy is due the acquirement of valuable data for this chapter, is prominent in financial circles, not only through his relations with this institution, but as one of the directors of the well-known bank of Crespo and Gutiérrez Guerra, of La Paz. The Credito Hipotecario de Bolivia has a branch office in Cochabamba. In consequence of a fraud perpetrated in the Cochabamba office a few years ago, which resulted in the loss of half a million bolivianos, this bank suspended the payment of dividends for a time, but the stockholders received eight per cent dividend for the last half-year of 1905, showing that the institution has recovered from the effects of its loss. The Banco Nacional de Bolivia, established in 1871, succeeded the Banco Boliviano, the first in Bolivia. It is one of the most important in the republic, and has a paid-up capital of three million bolivianos, with a reserve fund of nearly two hundred thousand bolivianos. In 1906 a mortgage section was established, for which the bank has a capital of one hundred thousand bolivianos. The dividends paid to stockholders in 1905 amounted to ten per cent. This bank has its headquarters in Sucre, with agencies in La Paz, Cochabamba, Oruro, Potosí, Tarija, and Tupiza. The Banco Francisco Argandoña, of Sucre, belongs to the Prince de Glorieta, the Bolivian minister in Paris, and, although it is constituted an anonymous society, all the shares are held by the Argandoña family, one of the richest in South America. The paid-up capital of this bank is two million five hundred thousand bolivianos. The principal agencies of the bank are located in Cochabamba, La Paz, Oruro, and Potosí. The head offices, both of the National Bank and the Argandoña Bank, are handsome edifices, situated in the Calle de los Bancos, or Street of the Banks, in Sucre. An important banking institution of Sucre is called the Banco Hipotecario Garantizador de Valores. It was established in 1887, and has a subscribed capital of one million bolivianos, with a paid-up capital of one hundred thousand bolivianos. In 1905 a dividend of twenty-nine per cent was declared on the paid-up capital. The emission of mortgage notes in circulation on December 31, 1905, amounted to five hundred and fifteen thousand three hundred bolivianos. These certificates bear an annual interest of ten per cent, and are quoted in the market at a premium of eight per cent. The Banco Industrial of La Paz does a very large business, especially in western and northern Bolivia. The authorized capital of this bank is four million bolivianos, its paid-up capital is one million five hundred thousand bolivianos, and the dividend paid in 1905 was fourteen per cent. It has branches in Oruro and Cochabamba.

Cochabamba, as the centre of a rich agricultural district, having extensive commercial relations, has several important banking institutions. The Banco Hipotecario Nacional, founded in La Paz in 1890, has its headquarters in this city, where it was established in 1903. The subscribed capital of this bank is one million bolivianos; it has a paid-up capital of one hundred thousand and guarantee and reserve funds of thirty-three thousand bolivianos. A dividend of twenty per cent was paid last year. One of the most recently established banks is the Banco Agricola, of La Paz, created by law in 1902, and opened on November 17, 1903. The authorized capital of this bank is two million bolivianos, the paid-up capital six hundred thousand bolivianos, the contingent and reserve funds eight thousand bolivianos, and the undivided surplus four thousand and forty-four bolivianos. Twelve per cent dividends were paid in 1905. The foreign banks of Bolivia are represented by the German-Chilean Bank, which has its Bolivian head office in La Paz and a branch in Oruro, and the Bank of Tarapacá, an English institution. The chief headquarters of the German-Chilean Bank is in Hamburg, the Bolivian agency having charge of all operations in this country, such as the arrangement of loans, the issue of drafts, letters of exchange, and similar business. There are several foreign life insurance companies that have agencies in Bolivia, chiefly Peruvian and Argentine enterprises.

Commercial progress in Bolivia owes a great deal to the efforts of the commercial societies, which are generally composed of bankers and importers or leaders in industrial development. La Paz, Sucre, Oruro, and Tarija, each has a Camara de Comercio for the purpose of stimulating trade; Cochabamba’s Circulo Comercial has the same object in view; and the Junta Comercial é Industrial of La Paz seeks the advancement of both trade and industry. These societies work by methods similar to those of the various chambers of commerce in England and North America, and among their members are managers of foreign as well as native business houses. In all the larger cities the Germans have established themselves in business, either on their own account or as representatives of German houses. English, French, Italian, Spanish, and North American merchants are among the European residents of La Paz, Oruro, Cochabamba, Sucre, and Potosí, though the Germans are in the majority. The importing house of Bebin Brothers, in Challapata, supplies a large territory with European and North American goods. The Bolivian house of Morales and Bertram is one of the most important business establishments of Sucre, and the German importers of Cochabamba have a flourishing trade. There is a growing demand for North American goods, and it is now no unusual occurrence to see an advertisement of articulos Norte-americanos as an especial attraction. The firms of De Notta and of Harris and Company, in La Paz, deal extensively in North American novelties. But it is possible even here to make a hopeless search without finding some familiar articles, no especial effort having been made by North Americans to introduce their merchandise. They are, as a rule, less informed than the merchants of Europe regarding this country, and are far behind the Europeans in learning the commercial needs of the nation. The diplomatic and consular representatives of the United States accredited to South America have had very arduous duties to perform in their efforts to educate their own people regarding these republics in general. The American minister, now in La Paz, Hon. William B. Sorsby, has won the admiration and esteem of the Bolivians by his constant and unfailing devotion to the task of making better known to the political and commercial world of the United States the actual conditions that govern Bolivia. The fact that sentiment is growing in favor of a better understanding between the countries of North and South America, and that trade between the two continents has increased twenty-five per cent in the past ten years, is largely due to the persistent, determined, and conscientious labor of the officials representing their governments in these countries. They have succeeded in overcoming, to some extent, the bad effects of sensational travellers’ tales founded on events of fifty years ago, and they are using their powerful influence to modify the prevailing ideas of the press, which still seems influenced by a tendency to draw imaginary pictures of thrilling social adventure and political pyrotechnics that are entertaining, perhaps, but not quite up to date. However, journalistic pride will not permit an antiquated idea to dominate beyond the period of its usefulness. Within a short time the world will see the newspapers of Europe and North America vying with one another to secure the account of the latest advance made in the political or intellectual progress of South America, instead of devoting sensational headlines to some stupid riot on a feast day, an event of no more importance than the average schoolboy’s row. Bolivia deserves that friendly judgment should be passed on the efforts her people are making toward national progress. Since the election of the present government nearly three years ago, its officers have worked in accord and with energy to promote the national welfare. Not a single change has been made in its Cabinet, though “ministerial crises” have been a conspicuous feature of several other South American governments. It is apparent to all who seriously study the tendency of affairs in this country that the prospect is bright for political and commercial progress, and that Bolivia is destined to occupy, one of these days, an important place among the great trading nations of the world.