Peruvian Corporation

The Peruvian Corporation Ltd.

Company type	Private
Industry	Transportation, Natural resources
Founded	20 March 1890 (1890-03-20) in London, United Kingdom
Founder	Sir Alfred Dent (board head)
Defunct	1958
Fate	Liquidated
Headquarters	London , United Kingdom
Area served	Peru
Key people	Sir Alfred Dent (director), G. A. Ollard (London management), T. E. Webb (Secretary), Clinton Dawkins (Peru representative), William Davies (Peru representative and manager)
Products	Railway operation, guano export rights, land and real estate trading, mining and nitrate exploitation, docks and shipping management
Parent	Peruvian Transport Corporation Ltd. (from 1955)

The Peruvian Corporation Ltd., also referred to as the Peruvian Corporation of London, was incorporated in London on 20 March 1890 under the Companies Act. Its board comprised ten directors, headed by Sir Alfred Dent. The London management included G. A. Ollard from Smiles and Co. Solicitors, while T. E. Webb served as Secretary. In Peru, the initial representatives were Clinton Dawkins and William Davies, the latter being the nephew of W. R. Grace and Grace Brothers – Callao. The company's formation aimed to settle Peru’s foreign debt and release its government from obligations tied to loans raised through bondholders in 1869, 1870, and 1872, which had financed railway projects. The main objective was to acquire both the rights and liabilities associated with these bondholders.

History

After Peru gained independence in 1826, it encountered escalating financial troubles, issuing bonds in 1865, 1866, 1869, 1870, and 1872 without resolving earlier debts. These bonds were secured by valuable guano deposits; however, Peru defaulted on interest payments on 18 December 1875. The War of the Pacific (1879–1883) further worsened the country’s financial position and that of its creditors, leading to intervention by 1889.

To tackle these fiscal difficulties and recover investments, the Peruvian Corporation was established in London. Its scope was extensive: acquiring both tangible and intangible assets in Peru and elsewhere; trading in land, agricultural products, and real estate; constructing and operating railways, roads, and telegraph systems; managing docks, harbours, and shipping ventures; exploiting mines and nitrate deposits; overseeing state properties; and representing the Peruvian Government as agents.

Grace Contract

Founded in 1865 by William Russell Grace and Michael P. Grace, Grace Brothers & Co., which later evolved into W. R. Grace and Company, developed a substantial commercial footprint spanning Lima and Callao in Peru as well as Valparaiso, Santiago, and Concepcion in Chile. By 1889, their operations included a prominent guano trade alongside the Grace Line shipping enterprise. In response to Peru’s financial crisis, the Elias-Castellon and Irigoyen-Delgado-Donoughmore protocols were formalized by 1890. That year saw Michael Grace and Lord Donoughmore successfully ratify the Grace Contract, initially established in 1886.

Original terms

According to the Grace Contract, the Peruvian Corporation took over devalued Peruvian Government bonds under the condition of controlling state-owned railways and guano exportation rights for a specified term. These bonds were converted into corporate shares. William Davies acted as manager of the Peruvian Corporation on behalf of W. R. Grace and Company. Subsequently, the corporation returned bonds to Peru in exchange for a 66-year concession over vital railroads—including the Southern and Central Railways of Peru—as well as rights to up to two million tons of guano located on Peruvian territory and nearby islands such as Lobos Island. Additionally, the government committed to making 33 annual payments of $400,000.

Modifications

In 1907, lease conditions were revised to extend railway control from 1956 until 1973 while reducing annual payments from 33 installments to 30. The corporation was also obligated to construct railway extensions reaching Cuzco and Huancayo. The majority of bonds were held by investors from England, France, and the Netherlands, which drew diplomatic attention concerning bondholder interests.

A reorganization occurred in 1955 when Canadian company Peruvian Transport Corporation Ltd. acquired ownership of the Peruvian Corporation’s shares. By 1972, Empresa Nacional de Ferrocarriles del Peru (ENAFER) was established by the government to assume railway operations by year-end. Documentation spanning from 1849 to 1967 is archived at University College London.